One of the more popular dictums as of late in the legacy Bitcoin (BTC) community is that bitcoin is now a store of value, not a true currency. Self-dubbed Bitcoin Cash (BCH) “CEO” Rick Falkvinge disagrees, arguing in a new video that bitcoin isn’t the store of value people are saying it is.
Falkvinge: BTC Doesn’t Meet Criteria
Falkvinge — the former European Parliament member and founder of the Pirate Party — is a thought leader in the Bitcoin Cash community who’s cheekily assumed the title of “Bitcoin Cash CEO” to highlight the open-source, permissionless nature of the fledgling cryptocurrency ecosystem.
As such, Falkvinge has thrown his chips in with the so-called “big blockers,” becoming nothing short of a bulldog for the 8 MB Bitcoin chain in the ongoing political skirmishes between the BTC vs. BCH communities.
Falkvinge’s latest salvo, then? Decrying Bitcoin as failing to meet the technical economic requirements that have traditionally characterized stores-of-value (SOVs). The Pirate-turned-Bitcoiner listed out his argument in a new episode of his “Rick Reacts” vlog:
“An economic store of value has a certain meaning. It doesn’t mean just that it stores value. It just doesn’t mean you can invest in it. It has a very specific definition in economic terms.
“And that’s maybe not Econ 101 but it’s right there on Wikipedia for anybody who cares to look it up … an economic store of value means that something fulfills three very strict criteria. It means that you can put a utility into it to a) to retrieve the utility predictably, b) at any later point in time, c) taking out the same amount of utility.
“[…] And people are going, ‘Well look at this, I bought [bitcoin] at $900 USD just before the start of the second quarter this year. It’s now at almost $18,000! That’s a 20 times appreciation — that’s a great store of value!’ No, that is not what a store of value is. That an instrument of wild, unbounded speculation at its best.
“A store of value means that you can predictably at any point in the future take out the same amount [of] utility. Taking out 20 times the utility makes it extremely not a store of value. Taking out 20 times the utility makes it … not a store of value at all.
“That makes it an instrument of speculation. And while speculating is absolutely fine, we need to make crystal clear what we’re talking about in terms of narrative here. This is not a store of value. And this is not a currency anymore.
The thrust of Falkvinge’s argument, then, is that it is technically disingenuous to refer to bitcoin as a SOV.
To him, the number one cryptocurrency at present has devolved into a speculative instrument, not a P2P currency as Satoshi Nakamoto originally described in the Bitcoin whitepaper.
Falkvinge Says Bitcoin Core “Goal Shifting”
As you can imagine, Falkvinge had choice words for those he holds responsible for the legacy Bitcoin’s “devolution,” as he sees it: Bitcoin Core’s developers.
For one, Falkvinge is particularly bothered by the increasingly prevalent argument that Bitcoin shouldn’t be a currency. In the vlog in question, he said:
“I hear people going from Bitcoin Core saying that ‘bitcoin was never meant to be a currency, it’s a store of value.’ That’s such bullsh*t for at least two reasons. First, bitcoin was meant to be a currency. Bitcoin Core has failed to make it remain a currency.
“No currency has 10, 20, 30 dollars in usage fees every time you use it. With a currency, I can pick up a penny coin and hand that over to somebody. Bitcoin was the same, it is no longer the same. It is an abysmal failure at shepherding a revolutionary technology to let it come to this point.
Echoes Vitalik Buterin’s November Comments
Falkvinge’s latest vlog argument is reminiscent of the comments Ethereum creator Vitalik Buterin made and caught considerable flak for back in November.
Specifically, Buterin spoke of “failure” in the same way Falkvinge does, suggesting Bitcoin Core has failed the Bitcoin community proper.
1. I consider BCH a legitimate contender for the bitcoin name. I consider bitcoin's *failure* to raise block sizes to keep fees reasonable to be a large (non-consensual) change to the "original plan", morally tantamount to a hard fork.
2. Theymos's censorship.
— vitalik.eth (@VitalikButerin) November 14, 2017
What’s your take? Does Falkvinge make any points you agree with? How about points you disagree with? And what about Buterin’s tweet? Be sure to sound off in the comments below!
Images via YouTube, Wikimedia