Bitcoin (BTC) is not a currency, and to be one it needs to be tied to a basket of commodities, says Steve H. Hanke, a Professor of Applied Economics at the Johns Hopkins University and a prominent expert on hyperinflation.
Hanke warned against investing in this asset.
“Bitcoin is a highly speculative asset, not a currency,” wrote Hanke in a recent tweet, attaching a Bloomberg tweet linking to an article on crypto and the caption: “Crypto’s getting boring.”
Hanke wrote:
“Cryptocurrencies must be tied to a basket of commodities in order to be considered a legitimate currency.”
The professor commented for Our that this particular tweet “mentioned a basket of commodities in passing,” and that it is only one out of the many tweets he has written on this.
“While a basket of commodities would be feasible and would work in a currency board system, I much prefer and have consistently elaborated on a gold-backed system,” he told us.
In a separate tweet, Hanke reiterated his belief that BTC is not a currency, listing what he calls its ‘plagues,’ and arguing that buying the token is “a fool’s game.”
“Bitcoin solves exactly the problem you would run into if you would try to do that. The only way to link a real-world good to a digital representation without a trusted 3rd party is via bitcoin’s proof-of-work.”
Nic Carter, co-founder of Coin Metrics, a provider of crypto asset market and network data, stated that Bitcoin is a synthetic commodity. He said that it is “novel, in that you can’t touch it, and it doesn’t have industrial uses like other commodities do. It’s purely monetary premium, whereas gold’s value might by 80-90% monetary premium.”
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