Tags: Eavis | dollar | digital | currencies

NYT's Eavis: Dollar's Pre-Eminence Faces Little Threat From Digital Currencies

By    |   Thursday, 03 April 2014 09:40 AM

Despite all the ballyhoo about the bitcoin, digital currencies are highly unlikely to supplant the dollar anytime soon, says Peter Eavis of The New York Times.

"It is not clear that virtual currencies will ever have the strengths and scope of the current system, which, let's face it, functions nearly all of the time," he writes.

To figure out why digital currencies haven't been more broadly utilized, you can just look at consumer behavior, Eavis explains.

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"Consumers have no problem rapidly adopting new technologies if they find them attractive. But they get a lot out of the current system," he notes.

"With minimal inconvenience, they can make secure non-cash payments online and in stores, and they can do so around the world at any time. The existing system also allows people to store their money safely in insured banks."

The creators of bitcoin didn't seem to be primarily focused on consumers. "Instead, they seemed motivated mostly by a desire to reduce the cost of a payments system. Such savings would most likely benefit merchants far more than consumers," Eavis argues.

"As things stand today, digital money is highly unlikely to become the new status quo. Anyone hoping to feast on bitcoin may not get anything more than raw onions."

Venture capital star Marc Andreessen, a partner at Andreessen Horowitz, is much more enthusiastic about the bitcoin. "I'm completely unfazed and plan to invest more," he tells The Wall Street Journal, referring to the currency's recent turmoil.

Andreessen, a co-founder of Netscape Communications in the 1990s, says the bitcoin brings back early memories of the Internet. "I'm having deja vu," he states. Bitcoin is "weird and scary and nerdy, and it's full of scams and frauds, just like the Internet was."

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Despite all the ballyhoo about the bitcoin, digital currencies are highly unlikely to supplant the dollar anytime soon, says Peter Eavis of The New York Times.
Eavis,dollar,digital,currencies
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2014-40-03
Thursday, 03 April 2014 09:40 AM
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