Bitcoin is witnessing a remarkable upward momentum these days, as the price of the currency rose to the level of 11 thousand dollars, after the currency was almost stable, between 9000 – 9300 dollars.

While many enthusiasts believe in Bitcoin and see it as the future of money, former Greek Finance Minister Yanis Varoufakis argues that Bitcoin will not be able to replace money.

It should be noted that the former Minister “Yannis” was holding the position of Greek Finance Minister when the country was going through a very difficult period, as it was not able to pay 1.6 billion euros to the International Monetary Fund.

Now Yannis is using his experience to discuss whether Bitcoin can succeed as an alternative to fiat money.

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in message An open source published on Monday, Yannis argued that Bitcoin should not replace fiat currencies because this would make capitalism uglier, nastier and more dangerous to humanity.

On the other hand, Yannis noted that there is some potential in the blockchain technology itself.

Why Bitcoin is not a socialist ally Reply to Ben Arc

– Yanis Varoufakis (@yanisvaroufakis) 27 July 2020

Bitcoin lacks the ability to absorb shocks:

In his letter, Yannis argued that Bitcoin is unable to respond to various economic problems such as the current coronavirus because its monetary policy is cryptocurrency and cannot be changed easily. At this point, he told the following:

Consider the crash of 2008 or the recent crisis caused by the coronavirus of 2020.

Suppose central banks did not have the ability to instantly create trillions of dollars, euros, pounds and yen, and instead had to rely on a spontaneous majority of bitcoin users to agree to a massive increase in the money supply.

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The result will be a collapse like the collapse of banks and corporations in 1929.

Bitcoin supply is limited to only 21 million units, a number that is not likely to change.

The supply of bitcoin is generated at a constant rate as the bitcoin metal halves every four years.

The Bitcoin network is unable to increase supply at will, and supporters of the coin see this as a good thing.

Yannis also noted that Bitcoin ownership is unevenly distributed, and that people who own a lot of it will not be happy when the idea of ​​increasing the supply is presented, because it will reduce the value of their holdings.

Thus, if Bitcoin were to replace fiat currencies, it would only exacerbate wealth inequality during crises and motivate the rich to keep their own currencies at the expense of the public good.

Yannis pointed out that:

Bitcoin dominance will not democratize economic life.

Yannis argued that even if bitcoin were to replace traditional money, it would change nothing for the majority of people in capitalist systems.

He wrote in this regard:

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Equity over land, resources, and machinery remains the same while private equity firms and pension funds continue to own the bulk of stock trading on Wall Street, City, etc.

All that will change is the disappearance of central banks and the community of Bitcoin users will determine the global money supply.

Yannis continued:

Jeff Bezos will continue to control and monopolize, and Facebook and other large companies in the world will continue to dominate their markets and exploit weak economies.

All the while, only private banks will find new ways to create different assets, this time tied to Bitcoin.

Replacing fiat money with bitcoin would take us back to a postmodern version of 19th century America.

All of these factors combined will inevitably lead to new lows, made worse by the inability of Bitcoin or the unwillingness of the rich to increase supply or adapt to crises somehow.

In short, the democratization of money via Bitcoin will not only fail to democratize capitalism, but will also give a powerful impetus to the forces of decline.

Blockchain, not Bitcoin:

Yannis likened the monetary system to a dog’s tail.

He was told that it was difficult to control and shake him, and added to that effect:

The democratization of money by means of the monetary commons will not democratize economic life, but rather make capitalism uglier, nastier and more dangerous to humanity.

The former Greek finance minister emphasized that while Bitcoin may not be the solution to many crises in a capitalist economy, blockchain technology may become very useful in creating a new type of financial architecture.

Having said all of that, a monetary commons that may rely heavily on something like the blockchain that underpins Bitcoin will undoubtedly be an essential aspect of a democratic economy.

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