Well-known Scottish historian Niall Ferguson wrote a long article dedicated to Bitcoin and Covid-19 published by Bloomberg in the column of expert opinions.
Ferguson taught at Cambridge and Oxford, as well as at New York University and Harvard, but he is known to the general public mainly for his work of dissemination, and in particular for the books “Empire: How Britain Made the Modern World” and “Civilization: The West and the rest “.
In addition, in 2008 he published the book “The Ascent of Money” in which he examined the history and evolution of money, which was also the subject of a series of documentaries aired on various television stations in the world, produced by the British broadcaster Channel 4, which won an International Emmy Award for best documentary.
In short, Ferguson is a historian who knows the nature of money and, especially, its evolution over the millennia. A few years ago, he openly stated that he believed that cryptocurrencies are the financial system of the future.
Therefore, the article for Bloomberg fits perfectly with the historian’s view of cryptocurrencies, and Bitcoin in particular, and it’s not surprising, especially since he claims things that have been well known in the crypto industry for several months.
Neil Ferguson, Bitcoin and the post-Covid-19 revolution
The article begins with an exploration of Glasgow in the last century and the dematerialization of money. At one point, Ferguson bluntly states that the world is currently experiencing a true monetary revolution, which is so multifaceted that few people are fully understanding its scope.
This monetary revolution is driven by technological transformation due to the Internet and was accelerated by the 2020 pandemic.
At this point, he compares the performance of the US dollar, gold and bitcoin. Since January 1, the dollar index has dropped 4% over the year, while the price of gold in dollars has risen 15%. The price of bitcoin in dollars, on the other hand, rose 139%.
Ferguson argues that this year’s bitcoin rally took many smart people by surprise, most notably New York University economist Nouriel Roubini, who was forced to change his tone during the year regarding his strong criticisms of the biggest cryptocurrency.
In fact, according to the Scottish historian, even financial journalists are capitulating, admitting that bitcoin has valid use cases, for example, as a protection against a future dominated by authoritarianism.
With regard to Covid-19, Ferguson points out that other pandemics have also favored greater monetization of the economy in the past. Specifically, Covid-19 accelerated progress towards digital money and significantly increased exposure to financial fraud and surveillance.
According to Ferguson, Satoshi Nakamoto’s real goal may have been to create the final safe haven, protecting wealth not only from the scourge of depreciation, but also from confiscation.
Given this, he points out that bitcoin is being increasingly adopted not so much as a means of payment, but as a store of value, citing MicroStrategy as an example. This is an adoption process that still has a long way to go, also due to some problems that will take time to resolve.
However, bitcoin offers an obvious advantage, namely scarcity, which is even more evident at a time when the fiat money supply is exploding.
For example, the dollar’s M2 money supply this year grew at an annual rate of more than 20%, compared to an average of 5.9% from 1982 to 2019, and the future weakness of the dollar, caused indirectly by the pandemic. , favors bitcoin.
Ferguson concludes by asking Joe Biden’s new American administration to recognize the advantages of integrating Bitcoin into the U.S. financial system, rather than trying to create a Chinese-style digital dollar.
Especially because the dollar itself was originally designed to be less centralized and more favorable to privacy than the systems adopted by less free societies.