13 years ago today, a forgotten blogger predicted the death of bitcoin. The cryptocurrency has risen 15,000,000% since his post.
Imagine predicting the death of bitcoin on a website that no longer exists. That’s what blogger Sean Lynch did 13 years ago today. When he wrote what 99 Bitcoins now classifies as the world’s first “bitcoin obituary,” a news article that predicted the death or demise of the cryptocurrency.
The post, titled “Why Bitcoin Can’t Be a Currency,” states that Bitcoin lacks the mechanisms to absorb fluctuations in demand, making it worthless over time.
He writes, among other things: “In nature, positive feedback loops, such as those that exist in bitcoin, are deadly; the only thing that has even kept bitcoin alive for so long is its novelty. Either it will remain a novelty forever, or it will go from novelty to death faster than you can blink.“
Since then, Bitcoin, the world’s most famous cryptocurrency, has defied critics and naysayers like Lynch. And since then its value has increased by 15 million (!) percent. Bitcoin has consistently exceeded all expectations, transforming from a niche experiment into a global financial phenomenon.
Yet the message was brought to the attention today by bitcoin historian Pete Rizzo. Notable because it proves how wrong bitcoin critics can be, with Lynch specifically claiming that economies need intervention and that bitcoin failed because it lacked it.
“The reason this can’t happen with government currencies is that government currencies are backed,” he writes. “They are backed by bullets. If demand for USD starts to fall faster than the US government wants, then the government can simply raise taxes without increasing spending, increasing demand while reducing supply. There are a lot of things the Fed can do, and the Fed tends to act first, but its activities are more difficult to explain. This is obviously not a perfect mechanism, as bubbles are still being blown and burst, but even this mechanism is not available with bitcoin.”
Today, more and more people are seeing how destructive that intervention can be, as central banks worldwide struggle to keep inflation under control.