Bitcoin as a global standard would be an 'absolute economic catastrophe' – Ernst & Young's global blockchain leader kitconews gold silver mining finance economics investing metals
If Bitcoin were to become a global monetary standard, it would be an"absolute economic catastrophe," said Ernst & Young's global blockchain leader Paul Brody.
Deflationary assets are especially terrible as global monetary standards during economic slowdowns. And one of the clearest examples from the past is gold, Brody added, noting that the gold standard failed for a reason. Many proponents of Bitcoin refer to the cryptocurrency as gold 2.0, and Brody views this analogy as fair."Bitcoin is digital gold. If you wanted to take the properties that people love about gold and recreate them in a digital system, you would make Bitcoin. And in many ways, Bitcoin is better gold than gold. The only downside is you can't bury it in your backyard," he said."But if we end up back on a gold standard, that will not be a good thing.
"During the pandemic, we underwent massive reconfiguration of the global economy. Overnight, we went from a global economy that was heavily focused on services to one focused on goods. In this space of a year, we reconfigured the entire global economy from doing things to buying stuff," Brody said."Now, we're turning around and doing exactly the opposite."
"I'm still on what I would call team transitory. After WWII, we had a similar global reconfiguration. We went from making lots of weapons and telling people 'not to spend and buy war bonds' to 'the war's over, let's party'. And the world, particularly the U.S., went through a pretty brutal battle with inflation. It lasted almost three years, and it peaked at 18%. That was not the beginning of long-term stagnation.
"The main red flag is that fundamentally blockchains are not just digital assets, they are technology ecosystems. And the big red flag around Bitcoin is technology ecosystems live and die by the number of developers that are building products and services on top of them. And not very much of that is happening in Bitcoin," Brody said.
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