Thailand getting wise to bitcoin
It’s a good thing that the Thai Finance Ministry “will join with other authorities to educate people about bitcoin”. However it begs the question: Who will educate the authorities?
First, bitcoin is not a coin, despite its being paired with actual currencies (as are other commodities).
And just because the mainstream media is calling bitcoin a “cryptocurrency” doesn’t mean the authorities should do so too.
Second, if bitcoin has a bad week (it plunged as much as 30 per cent last Friday), that does not mean that it “parallels with investment in Ponzi schemes” – for the same reason that if the SET goes from 1,753 points (January 1994) to 214 (August 1998) it isn’t necessarily a Ponzi scheme either.
Third, authorities should avoid making the mistake of saying bitcoin “is not legal tender” in Thailand. You are not breaking the law, for example, by settling your debt in bitcoin at the Lim Lao Ngow noodle shop in Bangkok’s Siam Square. In such cases bitcoin meets the definition of “legal tender”.
Fourth, authorities should warn of the speculative frenzy behind bitcoin, but shouldn’t say things like “the recent price surge was driven by speculation”.
Three main things drive bitcoin prices up:
1. Speculation: Folks buying and holding for a short period and aiming to sell quickly at a higher price.
2. Investment: Folks buying and holding for the long term not only to hopefully sell at a higher price in the future but also buying and holding for other very legitimate reasons as well.
3. Hedging: Folks buying digital assets – what should be called “cryptocommodities” – due to their lack of faith in fiat money.
For more on bitcoin’s milestones during 2017, readers can read my recent blog post: http://thenationaldebit.com/wordpress/2017/12/20/bitcoin-is-not-a-coin/
Eddie Delzio
Bangkok
