The current global market instability has called into question the reputation of Bitcoin (BTC) as a safe haven against inflation. These past few weeks, the continuous downward trend of different kinds of cryptocurrencies has investors worried and scared. Just yesterday popular youtube star KSI revealed how he lost 99.9% of his $2.8 million in LUNA.
In a recent interview with Lex Fridman on his podcast, Austrian economist and author of “The Bitcoin Standard,” Saifedean Ammous discussed the merits of Bitcoin. Ammous included both benefits and the criticism surrounding the major cryptocurrency Bitcoin, in the context of issues such as severe inflation impacting economies across the globe and the digital asset itself witnessing a hard time in the market. This is what the renowned economist had to say about these global challenges:
“I think a very large number of problems in the world are caused by easy money, are caused by inflation, and caused by the government having access to essentially an infinite recourse to people’s wealth and I think Bitcoin fixes this.”
“I think a very large number of problems in the world are caused by easy money, are caused by inflation, and caused by the government having access to essentially an infinite recourse to people’s wealth and I think Bitcoin fixes this.”He added.
Bitcoin Consensus Parameters
The economist also had a few thoughts regarding the consensus parameters of Bitcoin which he emphasized emphatically. Talking about the consensus parameters, he said he doesn’t believe they have not changed and remain the same. He also added that a large number of digital currencies have gone through hard forks, which the crypto community considers to be enhancements.
The author said:
“Well, you know what else upgrades all the time, Facebook, Apple, Amazon. Anything that centralizes is very easy to upgrade and that’s precisely why as Michael Saylor says these things are somebody’s liability, they are security. You’re carrying on somebody’s technical and economic liability they can hard fork they can 10x the supply tomorrow.”
Bitcoin and its Volatility
The volatility of Bitcoin, or cryptocurrencies in general, is perhaps its most controversial aspect, thus, naturally, the acclaimed economist addressed it as well. Defending the volatility of Bitcoin, the author stated:
“The dollar is not a lot of volatility day-to-day, the value of your dollar doesn’t change 40% or 20% overnight but it does go down reliably. It’s going to go down 40% you can count on it. So the option really is relatively short-term stability with long-term decline or short-term volatility with long-term rise.”
Bitcoin and Energy Use
Finally, when it comes to Bitcoin and its energy usage, the economist believes the digital asset’s energy usage is justified. Bitcoin, he pointed out, does not need to buy electricity from places with high demand because it can buy electricity from anywhere; “this is what’s truly mind-blowing about it,” he said.