Christians are called to be people of the truth. Since Satan is the father of lies, we Christians should call out and oppose any and every falsehood, wherever they may be found. As a Christian and Bitcoiner, I was disappointed and frustrated to read The Gospel Coalition’s article titled: “Ask The Economist: Should A Christian Invest In Bitcoin?” by Dr. Greg Phelan. Dr. Phelan’s Yale pedigree perhaps has slanted his view on bitcoin toward the establishment position against new forms of money.
It’s sad to see a Christian economist peddle the same, tired Keynesian talking points that have served to enslave humanity with its abject worship of statist monetary policies.
As a ruling elder in a Presbyterian Church in America church and a Bitcoiner, I had to respond and will break down the article piece by piece.
The article opens up as follows:
I have to stop right here.
First of all, Bitcoin is not merely one of many cryptocurrencies, it is the original – the “zero to one” discovery. Bitcoin is a special category and has no peer, due to its longevity, network size and strength, and large financial incentive framework. While people try to lump Bitcoin in with other cryptocurrencies, bitcoin has achieved both the Schelling Point, (or consensus pick), and the Lindy Effect (champion survivor) necessary to set it apart as a special currency. But let’s continue…
First, we come to read about bitcoin’s lack of dividend yield and capital gains. It’s true that itcoin has no yield because it’s not a stock. But not every investment needs a board of trustees and an annual dividend. For instance, real estate produces no dividend, and yet, we understand it to be a profitable investment.
The investment thesis for bitcoin is wholly different than for stocks or bonds. The investment case for bitcoin is that fiat currencies will collapse because people will prefer to move their capital to a monetary tool that will maintain, and even increase, its value over time. Simply put, the purchasing power of fiat currencies will trend toward zero because they continue to be inflated away by central banks.
Moving on: “Future dividends cannot justify a price increase for crypto.” That’s absolutely false. Precious metals can also be expected to rise in price due to the falling value of the dollar. Bitcoin is no different. Beachfront real estate can be expected to rise because more and more people are born every day, and those people will compete for the scarce, precious resource that everyone wants.
Dr. Phelan gets one thing right: “So why do people invest in crypto? Because they expect the price to rise.” Good job! However, Bitcoiners don’t expect the price to rise merely because there are more “suckers” to buy in, raising the price artificially. Rather, Bitcoiners assert that the number of dollars will continue to rise in comparison to the finite supply of bitcoin, namely, 21 million. Humans will need a finite monetary tool to store their wealth. That tool will be bitcoin.
The article continues:
“An asset that never pays a dividend but has a price that keeps rising is a bubble. An investor can believe bitcoin is a bubble and rationally invest so long as she expects to sell out before the bubble pops. But that isn’t investing; that’s gambling, and it’s a zero-sum game.”
This statement is misleading. Bitcoin is not a gamble because we know for a fact that the number of bitcoin is fixed by the code. It’s not a gamble that the number of fiat dollars will continue to increase into infinity. It is foolish to not purchase bitcoin because we know that there is a finite number of bitcoin and an infinite number of dollars. In the final analysis, holding dollars is an absolutely certain way to lose the value of one’s wealth, every day of every year.
Greg continues to talk about bitcoin in terms of a currency, but only “maybe.” He says, “But bitcoin is a much less robust means of payment than other currencies.” This, again, is false. Bitcoin continues to prove, over and over again, that it is a vastly superior payment method to every other form of payment. I recently used a wire transfer to deposit money into an account. It took me no less than FIVE DAYS for the money to finally settle. Don’t get me started on checks, which are subject to forgery and delay, or on credit cards with 3% merchant processing fees and 18% consumer interest. Bitcoin payments are finalized in as little as one hour, with no possibility of reversal, for all time. I recently sent thousands of dollars in bitcoin for 75 cents.
Traditional fiat money payment rails are subject to long delays and high fees. Merchants frequently get hit with chargebacks due to credit disputes as long as six months after the transaction. Many legitimate businesses have been denied financial services because they deal in weapons, political issues, cannabis, precious metals, and other so-called “risky” industries.
If a government believes that you are a terrorist, they have the power to seize your funds without a trial. If you are caught with a large amount of cash in your car, the cops can take it, without cause. If you take out more than $6,000 from your bank, they will report that transaction to the IRS. Dollars are a far inferior method of payment by every conceivable measure. What each of these drawbacks have in common is that they all stem from the government’s unquenchable thirst for control over your life. They believe that they, not God, have supreme control over your finances.
Continuing in the currency vein, “While there is a black-market demand for bitcoin transactions because of anonymity, the current level of payments can’t explain the price.” Ah, the old “black market” song and dance. This trite drivel has been debunked time and time again. Bitcoin has been used for illicit activity, sure, just like cash, Swiss bank accounts, wire transfers, and every other form of payment. Each and every bitcoin payment is recorded on the timechain permanently, making it a terrible payment medium for criminals.
The author continues, “As a currency, bitcoin is not as good as dollars or any other currency. There is no debate about that.” Well Greg, I debate! I debate! I’ve sent bitcoin to people all over the world with tiny fees without the need for permission from any bank or government. Just imagine how Christians could help their fellow believers in poor and/or sanctioned countries by sending them immediate payments, with low fees, without fear of government theft. With bitcoin, I can send a missionary in Iran payments every single day, without fear of delay or denial by government sanction.
Next we have the old devilish lie about price stability, “All economists agree that a stable price is highly desirable for a currency.” Wrong! I don’t want my money staying merely stable. I want my money to be deflationary. Why? Because that means that my stored wealth is benefitting from the increase in economic efficiencies over time. As time marches on, things should be getting cheaper and cheaper. We should see lower salaries because the number and quality of things that our money buys should increase as advances in knowledge and industrial efficiency improve. For more on why deflation is good, see the book “The Price of Tomorrow” by Jeff Booth.
Continuing on, “Bitcoin would have to displace global currencies like the dollar and the euro to have equivalent liquidity value. Most economists find that preposterous.” Dear Greg, did you also know that if man was meant to fly, God would have given him wings? Dr. Phelan’s statement reminds me of Paul Krugman’s comparison of the internet to a fax machine. Bitcoin is merely 12 years old and has a market capitalization of over $1 trillion. There are literally hundreds of registered bitcoin exchanges in the U.S. alone. There are more than 30,000 Bitcoin ATMs in the U.S. You can buy bitcoin using CashApp and Venmo. I won’t confuse you with the existence of the Lightning Network, but suffice it to say, I can send instant payments cheaper than the cost of a stamp while you’re babbling about liquidity. No one doubts the liquidity of gold and silver, even though no retail bank will accept your bullion deposit.
Dr. Greg Phelan again describes bitcoin as a bubble, citing the child-rapist economist John Maynard Keynes, “Bubbles can persist for a long time. John Maynard Keynes famously said, ‘The market can remain irrational longer than you can remain solvent,’” Keynes’ legacy as an economist is one that has produced more misery and suffering than perhaps anyone in the past 100 years. His theories of the benefits of government credit expansion, or cheap money, have propelled central banks to new depths of profligate lending, which ruins the natural business cycle. As opposed to the Austrian economist school ideals of allowing the market to set interest rates, Keynesian theories supply academic justification for government control of monetary policy. Keynes is a disgrace and should never be invoked except to mock as a scornful hedonist who had no regard for God’s law. While it’s true that markets seem irrational, at times, when the market discovers sound money, it drives value out of bad money into the good.
Next up, Greg posits, “With real assets, you earn a return because you put money at risk and it is put to productive use.” What better productive use could there possibly be than to wrest control of the monetary policy from maniacal God-hating socialists back into the hands of the working man? The reason bitcoin exists is that humans are unable to put their money to full productive use because the value of their money is melted away by the theft of inflation. See the genesis block statement, “Chancellor On Brink of Second Bailout…
Read More:Bitcoin Christians Are Called Money Truth
2021-11-06 17:00:00
