As Fiat ‘Worked’ Without being Backed, Could Bitcoin do It?
The very well-known and respected for almost two decades figure on global finances – ex-Chairman of the Federal Reserve Alan Greenspan commented on the matter during an interview on Fox Business.
Greenspan surprised many with his reputation commenting and adding his opinion on the major Bitcoin debate.
Greenspan turned to history to frame his comments on BTC, suggesting the cryptocoin behaved somewhat similarly to the unbacked currencies of the 18th century:
“I would use the analogy of Continental currency. Continental currency in 1775 was issued with no backing and it sold at par in the marketplace for quite a while until they started to build up more and more printing of continentals.”
“Human nature is such that if you get something such as Bitcoin, you think there is some value there whether there is or there isn’t. But that’s the same thing as a Continental, greenbacks in the Civil War, all of these currencies which didn’t have any backing.”
The debate on the subject if there is or is not inherent value to Bitcoin between progressive and traditional economists today is being acknowledged by Greenspan with his commenting lines
For his part, though, Greenspan’s previously and unsurprisingly acknowledged that he camps with the former, remarking back in 2013 that:
“You have to really stretch your imagination to infer what the intrinsic value of bitcoin is. I haven’t been able to do it. Maybe somebody else can.”
What makes his side of the table on the matter more interesting is the practicality that he was referring to. As he mentioned that despite Continental currency had no backing, it worked and did ‘its job’ in the order of its day.
So, too, does Bitcoin have the opportunity to do that in the here and now.
Except instead of just working and functioning, Bitcoin and other cryptocurrencies like it bear within them the promise to revolutionize civilization’s financial order for centuries to come.