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- Nik Bhatia states that the credit money systems are non-sustainable.
- Bhatia’s perspective is that Bitcoin is the new gold. And his vision of bitcoin is that it is base money for tomorrow as gold had been for yesterday.
- Venezuela’s oil-backed currency, Petro is one of the controversial implementations of this kind of system.
Outpouring the country with fiat at times when the coronavirus pandemic has weakened the economy might prove to be a not-so-good idea. The Federal Reserve unveiled about various new lending programs that involve an enduement of $2.3 trillion into the US economy.
Bank of England has reported that it would offer its help temporarily in government cash flows and will provision additional funding through a temporary short-term source. Although it arose concerns regarding inflation, it was Bitcoin and Gold that were distinct.
Nik Bhatia stated that the credit money systems are non-sustainable. Nik Bhatia is a researcher and a popular Bitcoin advocate. He further added that when huge debt starts to take existence, they collapse. This follows the Fed’s entry to prevent its collapse.
Following the sell-off that occurred last month, it is obvious that there has been a rise in the institutional support for Bitcoin and the cryptocurrency markets, Bhatia said. There is a recuperation of the industry, he added.
Bitcoin is base money for tomorrow as gold had been for yesterday
He sounded positive when questioned about Bitcoin being used as the base money in the future as Bitcoin matures. He acclaimed that Bitcoin is another asset where basing a money system off is possible. His perspective is that it is the new gold. And his vision is that Bitcoin is base money for tomorrow as gold had been base for yesterday.
Bhatia also happened to state his views on the co-existence of asset-based monetary systems and the credit money system. Concerning this, he added that in history an asset-based monetary system has been under gold standards. However, this does not imply that one cannot have a credit money system under it. But for the issuance of money, an explicit restraint is the amount of gold that is there in one’s bowl. Hence, it is the best model for a Bitcoin monetary system to go forward.
On an interesting note, a majority of the countries in the early 20th century used the gold standard for the management of national currencies’ value. However, the stimulation by WWI causing economic disruption ended it sooner. Following which the countries made use of the fiat money system, although asset-backed currencies have their benefits.
For example, a central authority cannot manipulate the value set by economic principles. Venezuela’s oil-backed currency, Petro is one of the controversial implementations of this kind of system. Nonetheless, Petro has remained immersed in controversies as the country’s economy remains intact.
