Does Bitcoin Meet the Test for Being Money?
Investor Doug Casey: Bitcoin is Money, But May Not Last
Investor pro Doug Casey, founder of Casey Research, has changed his perspective on what Bitcoin is and is not. Previously, Casey held a mixed view of cryptocurrencies, doubting if they had the basic principles that make a currency.
However, after further research and consideration, Casey has affirmed his view that Bitcoin is, indeed, money. This evaluation is based on five principles that make up a currency - durability, consistency, divisibility, convenience and usability.
Among these five criteria, Casey says, he has always believed that Bitcoin meets all of them nicely, with the exception of usability. His concern previously was that Bitcoin had little real-world use cases. Casey, however, has changed his mind, saying:
“The problem I had with Bitcoin to start with was the fifth point: does it have use value in itself, so you can’t get stuck holding the bag? And I said that was the problem with Bitcoin. But I was wrong about that… The bottom line, Bitcoin passes the medium of exchange test for the moment and store of value test for the moment. So you can definitely say it’s money—for the moment.”
Bitcoin destined to fail?
Casey’s comments reflect the opinions of other analysts, including the Economist, which echoed Casey’s comments, saying that Bitcoin is indeed money. The article used tests for value based on the famed economist Charles Kindleberger, who wrote the quintessential analysis of bubbles in 1978.
Casey, however, goes on to say that the reality is that Bitcoin can and will change. He concludes by saying, “I have little confidence Bitcoin will be here say five years from now.”