Cryptocast: Is Bitcoin a bubble?

Is Bitcoin a bubble or is it a good alternative to fiat money? In this episode of the Cryptocast Herbert Blankesteijn and Paul Buitink talk to macroeconomist Jasper Lukkezen about the future of virtual currencies. According to Lukkezen, Bitcoin has many characteristics of a bubble, because it has no intrinsic value and people buy it mainly in the expectation of being able to sell it for more money. In that respect, he says, virtual currencies are more suitable as an investment than as a means of payment.

Buitink notes that this 'Greater fool theory' is not always the case, because people are still Buy gold as a tool for storing assets. This is despite the fact that the precious metal only has a limited number of industrial applications. Bitcoin could also play a similar role in the future, but Lukkezen does not see that happening yet. He does not see cryptocurrencies as a good alternative to fiat money, because according to him, the money supply must be able to adapt to the economy. This is not possible with cryptocurrencies, because their supply is constant or growing at a fixed rate.

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