Are the premises and promises of Bitcoin false? Brian P. Hanley explores this potential scenario.

Designed to compete with fiat currencies, Bitcoin proposes it is a cryptocurrency alternative. Bitcoin makes a number of false claims, including:

• Solving the double-spending problem is a good thing
• Bitcoin can be a reserve currency for banking
• Hoarding equals saving
• Bitcoin can expand by deflation to become a global transactional currency supply.

The author of this paper claims that Bitcoin’s developers combine technical implementation proficiency with ignorance of currency and banking fundamentals. He goes on to make some big claims about the promises of Bitcoin.

In his opinion, Bitcoin is most likely an accident born out of ignorance with some pecuniary interest thrown in. It should be obvious that even though Bitcoin was created with built-in scarcity, every B itcoin in existence is itself newly created money. This is another irony of Bitcoin – while Bitcoin proponents decry the ability of governments to manufacture money, Bitcoin is an entirely manufactured currency, which proponents intend to value in fiat currencies in order to profit. It should also be obvious that certain proponents have positioned themselves to make money by running exchanges and accumulating Bitcoins.

Access this research for a full understanding of why some Bitcoin promises could be false.