Promoters claim that bitcoin is a new type of money, reduces transaction costs by abandoning intermediaries and will become a safe asset that they call ‘digital gold’. The bitcoin network, in fact, is a game of chance subject to existing gambling regulations.
Economic theory states that money should reduce transaction costs for payments, loans and relative valuations, which requires a stable value. The extreme price volatility and the high transaction costs – especially the time component – make bitcoin almost useless as money. Bitcoin increases, instead of reduces, transactions costs. Furthermore, an intermediary exists – the miner – who charges a transaction fee. Finally, the bitcoin system has no responsible issuer. So, if the system breaks down, holders have nobody from whom to claim – or to whom to assign blame.
“Bitcoin has no cash flow or utility, and statistics show that it is no hedge against anything”
