Doug Casey Learned To Love Bitcoin With Aristotle's Help
By October 30, 2017– Published on
According to Doug Casey, he was given a pitch to buy Bitcoin back in 2013. But at the time he really didn't see it as being a viable currency, due in large part to its lack of intrinsic value. Of course, he wasn't alone. Many of the early adopters of Bitcoin, and cryptocurrencies at large, were well outside of the traditional financial system.
But recently Doug Casey decided to come out in favor of Bitcoin, and with the help of age old financial wisdom he has described why the cryptocurrencies may have a long way to run. It all comes down to their ability to be used as a unit of exchange, and their relative advantage when compared to the other fiat currencies that are so popular with the international community.
A US Dollar, like a Japanese Yen or Vietnamese Dong is basically worthless. The same can be said of Bitcoin or Ethereum, though this is only a part of the story. The world uses fiat currencies to create trust, facilitate interaction, build up organizations, and ultimately, create value. With a market cap that is easily over 100 Billion US Dollars, it is fair to say that Bitcoin has gained widespread acceptance, but now, according to Doug Casey, the question is: How long can it maintain its value?
Some Old Advice
We don't often associate monetary ideals with classical philosophy, but that is something of an oversight. Doug Casey took the five properties that Aristotle described good money as possesing, and applied them to Bitcoin. Aristotle said that money must be; durable, divisible, convenient, consistent and have an inherent use in and of itself. While Mr. Casey was able to grant Bitcoin the first four qualities with ease, the last requirement was difficult.
Bitcoin, Ethereum, or any other cryptocurrency has as much or as little value as any other fiat currency. That is to say, little or none in the absence of a market that accepts it as a means of trade settlement. This is perhaps why veteran investors were so slow to embrace Bitcoin, as it has only achieved prominence in the last two years or so. Now that Bitcoin has a large and growing market, and it is very liquid, Doug Casey is ready to accept it as money.
But the question still remains, does Bitcoin really make a compelling buy after rising in value so much, and in so little time?
A Curious Question of Consistency
Bitcoin has risen nearly 500% year to date, at the time of writing. This doesn't seem like consistent performance, especially when viewed against other major fiat currencies, which tend to rise or fall in double digits on a yearly basis. This raises some interesting questions about the long term viability of the cryptos, and how they might fit into the international financial system on a long term basis.
While Bitcoin and the other cryptos have been all the rage of late, gold and silver have shown themselves to be a stable store of value, over most of recorded history. It is curious to see the introduction on Bitcoin Gold over the last few weeks, and it will be even more interesting to see what Doug Casey has to say about all of these recent developments at the next Silver and Gold Summit on November 20th and 21st in the heart of downtown San Francisco. He will be joined by a host of legendary investors, and some of the foremost names in resource development. It is hard to imagine a better place to get into the mix, and we hope to see you there!