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The Dollar Will Never Fall to Bitcoin

Last month, several people appeared before a U.S. Senate committee to defend bitcoin, among them Patrick Murck, general counsel of the Bitcoin Foundation, responsible for the quote above. You can hear in Murck’s testimony that jingling sense of Silicon Valley certainty that comes with the knowledge that this technology, unlike all the others, will be immune from the ravages of historical experience.

Bitcoin is an extraordinary innovation. It also will never replace the dollar or the euro, what Murck refers to as “fiat currencies.” Fiat will win over bitcoin for the same reason it won over gold, silver, and copper in early modern Europe. Central banks, too, are a form of technology. Like other technologies, they’ve improved with iteration. Since the establishment of Sweden’s Riksbank at the end of the 17th century, central banks have been trying out new strategies, watching each other and copying what works.