Bitcoin clash at New York’s Soho Forum
Two prominent bitcoin commentators clashed at a forum in New York on Tuesday night as the assertion that the dominant cryptocurrency will gain mainstream acceptance was countered with the view that it is merely a speculative asset.
Bitcoin vs fiat currency – the debate rages on: Shutterstock
Speaking at the Soho Forum, a monthly series of debates held in Manhattan, Erik Voorhees, chief executive of exchange service ShapeShift, was reported by Coindesk as saying domestic fiat currencies backed by governments and central banks would eventually be replaced by advancements in bitcoin and blockchain technology.
He added that through gradual adoption would eventually see the most popular cryptocurrency triumph.
Speculative asset
Economist Peter Schiff, chief executive and global strategist at Euro Pacific Capital, disagreed, saying that the adoption of bitcoin was not to replace other currencies, but merely to make investors rich.
“It is largely seen as a speculative asset,” he said.
Voorhees countered this argument by saying that bitcoin was already being used in cross-border transactions and that its limited supply left it resistant to inflation.
Unreliable store of value
Schiff also weighed in on the store-of-value debate, saying that price volatility was too high to make it a reliable currency.
“The biggest problem with bitcoin and why it can never be used as money is because currencies must be a reliable store of value, not just a medium of exchange,” Schiff said.
Voorhees countered by acknowledging the volatility of bitcoin, but added that this trend was dissipating.
He said: “I remember when it was a big deal when bitcoin moved 50%. Today, it’s a big deal when it moves 10%. I think in a few years it’ll be a big deal when it moves 2-3%. While bitcoin is volatile today, I think this problem is self-correcting.”
Bubble
Schiff admitted that a globally-acceptable form of cross-border payment would not likely be represented by a fiat currency, but added “replacing fiat currency with digital currency was not an improvement”.
“The crypto bubble will pop before the fiat bubble,” Schiff added.