One of the comments on the article:
“ Banks create money out of nothing. Where does the real wealth in the economy lie?
It’s easiest to see when people get it badly wrong Weimar Germany and Zimbabwe had created far too much money compared to the goods and services available within the economy causing hyper-inflation. States can just create money, and the last thing you want is too much of the damn stuff in your economy. They had made so much money it lost nearly all its value, and they needed wheelbarrows of the stuff to buy anything.
States can create money out of nothing as well. You need the right amount of money in the economy for the goods and services available within that economy. The real wealth lies in the good and services available with the economy and is measured by GDP.
Central bankers actually look at the money supply, and expect it to rise in line with the new goods and services in the economy, as it grows. More goods and services in the economy require more money in the economy. This is the problem with gold and Bitcoin, they are not really flexible enough.”
This is true! But there are quite a few other projects in the “defi” space (defi meaning decentralized finance, although I’m not convinced that it needs to stay fully decentralized to be useful). Perhaps the invention of smart contracts will be as revolutionary as the introduction of double entry bookkeeping in Italy, the maturation of insurance markets in London, or the invention of the modern corporation in the Netherlands.
Its behind a paywall. Archive link https://archive.is/aYpCn
Agree with the title's premise, but there is no interesting conclusion here, which is regulators and economists like fiat money (I'm being somewhat reductionist, but it still isn't a particularly groundbreaking assertion).
The author doesn't go on say bitcoin has no value, or no place in the broader financial system. The author makes clear bitcoin won't usurp banks. Which is a very believable point to accept.
Ultimately, banks and fractional lending have the upper hand because we collectively believe the outcome is better: higher growth, stable employment, etc. If regulators egregiously fail to deliver these benefits in the future, there's a potential successor waiting in standby. And 10 to 15 years ago, we didn't have that.
Overall, crypto is good in ensuring existing actors fulfill the functions they've promised and are obligated to do.