Cash is not a savings, and scarcity alone does not create value.
Bitcoin and other cryptocurrency investments are still actively advertised around the world. On my recent trip to Tokyo, I saw glowing billboards with giant Bitcoin signs and bookstore tables stacked with books on NFTs.As I walked through downtown San Francisco, the face of FTX founder Sam Bankman-Fried (SBF) came to me and told me, “The future of investing is cryptocurrency, do you want to join?”
Most ordinary users who buy cryptocurrencies probably won’t conduct an in-depth, careful analysis of their fundamental value, either as a currency or as a technology. Instead, they might buy Bitcoin in 2013 because someone at work and now he drives a Lamborghini, or because their cousin bought an NFT and made huge profits, but the Bitcoin and Web3-related stories are There may indeed be some importance here. When ordinary people ask themselves, “Wait, why am I buying this thing again?” Even if the story itself doesn’t convince them to buy, there’s a story to tell them why it’s a good investment.
So I think it’s helpful to take a practical look at some of the economic stories circulating in the crypto world.These stories are hard to pin down precisely because crypto is a decentralized enterprise and there is no single authority telling you how to think about Bitcoin or the Metaverse etc. Therefore, describing a story circulating on the market as a typical character always puts people in danger of being a “scarecrow”.Nonetheless, I think there are some important economic mistakes in the stories I’ve seen people tell about cryptocurrencies on Twitter and elsewhere – mistakes that have implications for how we should view the value of Bitcoin and other blockchain assets. important influence.
Myth 1: Cash is a long-term savings
Bitcoin proponents often see it as an alternative to fiat currencies like the U.S. dollar. They give a lot of reasons why fiat currencies always fail, and many like to declare the death of the dollar (so far, too early). This forms…