The internet currency Bitcoin is growing in popularity and notoriety, even if its value is unsteady.
The value of a single Bitcoin spiked to nearly $200 earlier this month, gains that have largely been lost as the "bubble" deflated, sending concerned investors and the media into paroxysms and spurring fears of a meltdown in the nascent marketplace.
So far, the doom hasn't materialized, but many people are still skeptical of the long-term usefulness of Bitcoin. Its strengths -- that it is not regulated by any government or issued by a bank -- are also it weaknesses.
A new poll by the IGM Forum at the University of Chicago Booth School of Business shows 30 out of 38 top American economists believe Bitcoin's inherent instability makes its usefulness limited. Seven of those economists said they strongly agreed with that position.
The survey asked economists their thoughts on the following statement: "A bitcoin's value derives solely from the belief that others will want to use it for trade, which implies that its purchasing power is likely to fluctuate over time to a degree that will limit its usefulness."
While the majority of respondents agreed, some answers stick out. "Hahahaha. ROTFL," wrote Austan Goolsbee, currently an economics professor in Chicago and former economic advisor to President Obama during his first term.
Goolsbee also said he had the highest confidence in his assessment.
"Fiat currencies depend on belief others will use it, but national currencies can be used for taxes and can depend on some gov. support," said José Scheinkman at Princeton.
But a few respondents seemed a bit rosier on Bitcoin's outlook, or at least less dour.
Nancy Stokey of Chicago noted that Bitcoin's dependence on public belief is true of any currency. "As is true for any fiat money---and also for any commodity money."
Of course, few economists foretold the crash of the global economy, so maybe they aren't the best people to ask.
- Contribute to this Story:
- Send us a tip
- Send us a photo or video
- Suggest a correction
