For some, that means bitcoin can never achieve ubiquity.
“Economies perform better when they have managed monetary policies,” the Bank of England’s chief cashier, Chris Salmon, said at an event to discuss bitcoin last week. “As a result, it will never be more than an alternative [to state-backed money].”
To macroeconomists, bitcoin is not scary because it enables crime, or eases tax dodging. It is scary because a world where it is used for all transactions is one where the ability of a central bank to guide the economy is destroyed, by design.
For bitcoin developer Hearn, that is not a concern.
“Bitcoin’s monetary policy would only be relevant if it were to be adopted by an entire economy, which isn’t going to happen any time soon,” he said.
Already, alternatives based on bitcoin have sprung up. For instance, litecoin speeds up transaction processing and freicoin introduces measures to stop people hoarding their money, but both are essentially the same technology, “forked” from the original. There is even nothing to stop a nation state declaring its own version of bitcoin as legal tender.
So even if the currency of the future looks like bitcoin, it might end up being a distant successor of the pioneer.
“Is the technology of bitcoin a window into the future?” Birch asked, adding: “Yes. Is bitcoin itself? No.”