Bundesbank Comments on Bitcoin

The German newspaper Welt cites Bundesbank leader Carl-Ludwig Thiele with some warning comments about Bitcoin. He says Bitcoin is not a good store of value.

I disagree.

The comment tells people to “look at a chart”.

If you do that, you will see that the “safe” Euro has lost massively in value against bitcoin just about every year for the last eight years. So this comment doesn’t make sense for everyone actually following the advice of looking at the charts.

Thiele (the Bundesbank leader quoted) said something that makes sense as well. He noted that Bitcoin is only a niche product right now, comparing the 350,000 transactions a day to 77 million credit card and bank transactions in Germany alone.

That in turn was his reason to not call for banning Bitcoin.

If you don’t approve of banning Bitcoin, the small transaction capacity is actually an advantage for now. Once Bitcoin scales one way or another, that advantage goes away. At Visa scale, Bitcoin will face a completely different level of regulatory scrutiny. Now it is still viewed as a child by many outsiders (at eight years of age not an unreasonable view) and held to lesser standards.

I recall that Satoshi Nakamoto was against using Bitcoin for circumventing the Visa ban on Wikileaks in 2010, since that kept Bitcoin off the radar of regulators longer.

It may make sense now for similar reasons to give Bitcoin another couple of years to grow before it scales to Visa levels.