In a recent exchange at a meeting for the Committee on Small Business, Congressman David Schweikert decided to ask the panel of distinguished guests about the possibility of Bitcoin as a long term threat to the US dollar. Although he admitted that this is nothing to worry about over the short term, the reality is that we don’t know where we’ll be ten years from now. Even if Bitcoin is not the cryptocurrency of the future, we could be facing a situation where some form of stateless money is eventually preferred over fiat currency. The strange part about the exchange between Congressman Schewikert and one of the guests on the panel was that the Congressman was the one who seemed to actually be defending Bitcoin as medium of exchange.
Professor Bitcorn Strikes Again
Mark T. Williams, also known as Professor Bitcorn, was the one who was debating with Congressman Schweikert as to whether or not the bitcoin could eventually become a real currency. Williams used to work at the Federal Reserve, but most bitcoiners know him as the guy who claimed the price of a single bitcoin would drop to around $10 by the summer of 2014. Professor Williams continually claimed that the bitcoin could never be a currency because it isn’t issued by a government. This is really just a matter of semantics because bitcoins could eventually be a widely-used medium of exchange. While the price of the bitcoin is undoubtedly volatile right now, it’s not that crazy to think the price could eventually stabilize in ten years. What would that mean for the status of various fiat currencies around the world? Not only does it cause a problem for controlling the money supply that most people use on a regular basis, but it also creates an issue when it comes to government issued debt. Congressman Schweikert asked what a Bitcoin economy would do to countries, like the United States, who are dealing with a large amount of unsustainable debt, and Professor Williams didn’t really have an answer. He simply stated that he doesn’t think this is a viable threat due to the lack of stability in the price of bitcoins. It’s also interesting to note that Senator Mark Warner actually brought up a similar concern during the original Bitcoin hearings in October.
Politicians are Drawing Lines in the Bitcoin Sand
It seems that politicians are finally beginning to take sides in the Bitcoin debate. There are people like Jared Polis who seem to be more open-minded when it comes to the future role of cryptocurrencies, while people like Senator Joe Manchin would like to seem them heavily regulated or simply banned. We’re not at the point where Bitcoin has become a big campaign issue during election season, but it will be interesting to see what happens once that time arrives. There will definitely be certain politicians who do nothing but talk about terrorists and protecting the children when it comes to Bitcoin, but there will also be more practical individuals who understand that this is a new technology that needs to be embraced, much like the Internet. I wouldn’t be surprised if the topic of Bitcoin comes up in some debates a year or two from now, and it should be rather easy to figure out which side of the argument potential legislators are going to land. The ones who think we need to continue the War on Drugs will also think Bitcoin should be banned, while the ones who think the decriminalization of drugs might be a good idea will also support Bitcoin as a technology. This is a rather big generalization, but I would be surprised to see too many politicians stray from the logic here. It’s really the difference between a politician who tries to use fear to control people versus one that just looks at the facts.