David Marcus – the head of Facebook’s blockchain division – had some unusual things to say about bitcoin.
Marcus: BTC Isn’t a Currency
In a recent interview with CNBC, the Facebook boss explained that he didn’t think BTC was a currency, and instead claims it has similarities with precious metals which cannot necessarily be used to purchase items but are a great store of value.
In the interview, Marcus explains:
I don’t think of bitcoin as a currency. It’s not a great medium of exchange because of its volatility. I see it as digital gold… It’s an investment class that’s decorrelated from the rest of the market. Why feel threatened by that?
On one hand, Marcus’ words are rather encouraging and flattering. Bitcoin has been known to stay stable during times of economic strife. Remember last August when the trade war between China and the U.S. really started to heat up? The stock market took a nasty plunge, whereas bitcoin spiked to nearly $12,000. It knows how to stay strong during times of trouble, and in this way, it is a form of “digital gold” as he says.
At the same time, he claims it’s not good as a payment tool due to its volatility. However, one must question whether this volatility would exist as strongly as it does if the currency was permitted as a means of payment more often. Bitcoin and several major cryptocurrencies were originally designed to serve in lieu of cash and credit cards for people who didn’t have access to traditional financial tools.
If they lacked valid credit or were being trampled by oppressive regimes that didn’t allow them appropriate access to valid banking strategies or checking accounts, bitcoin could ultimately serve a great purpose in getting them the items they needed to survive.
As it stands, many companies, i.e. Starbucks, are now looking to pave the way for cryptocurrencies like bitcoin to be used as means of payment more often. The problem is that this is coming too late. For a currency that’s been around for more than ten years, these were steps that should have been taken in the very beginning, so to let all this time go by arguably allowed the system to fall prey to outside market influence.
Why Can’t We Give It a Better Chance?
Look, for example, at the U.S. dollar. The dollar is nowhere near as volatile because it is being used all the time as a method of payment. As it’s in use and therefore in circulation, it is not as vulnerable to price swings.
Bitcoin is not regularly used to pay for items. Thus, there’s nothing to keep it in check, which is potentially why it remains volatile. If bitcoin were given equal chance to the dollar and other forms of fiat, perhaps it could hold its ground more easily.
