If there’s one thing that can be said about bitcoin, it’s that it’s a very polarizing unit of currency. For every person that believes in it and stands by it, there’s another that thinks it’s the work of dark forces – an entity that’s sure to bring down the infrastructure of every country that uses it.
One of those people is Tobey Karen Scharding, a visiting professor at Rutgers University. Scharding isn’t so much against bitcoin and other cryptocurrencies specifically, but she does feel the “ethics” behind digital units of finance tend to suffer greatly for the sake of power, wealth and ignorance regarding how money works.
One of her primary problems with bitcoin is in how it’s given value. Despite being a digital currency, bitcoin is considered “fiat” by some analysts in the sense that many people agree it has value. Scharding thinks this a very inappropriate way to view bitcoin, and she believes it’s only like to lead to trouble in real-world finance.
What Makes Fiat Currency Real?
“Calling it a fiat currency makes it seem that the value or the specific exchange value is more up for grabs than it actually is. The U.S. dollar is a fiat currency as well, but that doesn’t mean we can just change its value just because we changed our minds about what it’s worth. It involves a lot of different factors.”
Another big problem she has is the fact that bitcoin and other cryptocurrencies are largely decentralized, which means there are no banks or government institutions officially supporting them. She asks:
“What characteristics does a currency need to be ethical, and does bitcoin have these characteristics? One of the ways it falls short is that it’s not regulated by a government or a bank like most national currencies. It works to secure that everyone in the community using the currency has access to goods and services, and that the currency will have value ensured by those regulating it.”
You’re Taking a Chance with Crypto
This has proven to be troublesome in the past. When a cryptocurrency hack or theft occurs that results in lost units for customers, there’s always a chance those units will stay gone forever, and that the victims will not get their funds back. It’s not a pretty picture, but as cryptocurrency exchanges are not government or bank-backed, they are unable to offer FDIC insurance or similar protective measures. Granted some exchanges and similar platforms are now offering safeguards against such events, that’s always a chance that customers will take should they decide to delve into crypto.
Scharding also believes that neither bitcoin, nor any other cryptocurrency will be able to solidify its position as a national currency given that no nation establishment is supporting their worth. In addition, she says most people are not fully ready to give up the safety and security they receive from state and/or federal banking institutions.
“I’m personally confused by the idea of a country globally recognizing and adopting a cryptocurrency as opposed to their own. It’s just baffling to me that places like Venezuela would even entertain that idea.”
There’s a Reason Why Bitcoin is in Use
Scharding seems to be forgetting, however, that countries like Venezuela have little to no access to solid fiat currencies, and thus need alternatives to remain afloat and keep their infrastructures alive. For Venezuela, the answer was “supposed” to come in the form of the petro, but the currency has been so enveloped in controversy since its debut that bitcoin has ultimately taken the top rung on the financial ladder.
Either way, Scharding considers bitcoin an “unethical currency” in the end, claiming:
“It’s unethical because of how it undermines the value of national currencies, and to the extent in which national currencies undermine the safeguards of millions of people. That’s the real danger of bitcoin.”