Humanity is going through one of the most complicated moments in its history. Part of these difficulties have been accelerated by the Coronavirus crisis. However, it has only exposed structural problems that have existed for a long time. Therefore, it is normal that more and more people talk about Bitcoin as an alternative to the current world economic system. And it is in the middle of this debate that Mark Cuban questions the utility of Bitcoin.
A complicated moment
The world economic system has never been perfect, nor should we pretend that it is. Well, since its definitive consolidation in the 1970s, when the gold standard was broken and fiat money began to reign throughout the world. Although the renewal of a capitalist system in crisis was indeed achieved, new systemic problems have also been generated that are now beginning to become obvious.
And that, when the base of the entire economic system is in the financial system. Which in turn depends on the issuance of virtual money, whose value depends on the trust of people in the State that controls it. Important windows are opened for a process to financialize the economy.
This is what is known as the confrontation between Main Street, or the productive sector of the economy, and Wall Street, the financial sector. Well, although both are necessary for the operation of any society (after all, productive companies cannot exist without financing).
When the relative importance of Wall Street becomes greater than that of Main Street, we can be sure that there is a fundamental problem to attend to.
Precisely what Preston Pysh refers to when he analyzes the tremendous monetary issue of the central banks during the last decades. Which, however, has not caused an inflationary crisis in the entire world.
What Pysh explains by showing that most of the money created by central banks has never reached people’s hands to demand products, but has concentrated on the richest sector that has reinvested it on Wall Street.
Mark Cuban does not trust Bitcoin
Of course, faced with a situation like this, with inequality on the rise while the financial system does nothing but grow, the Pysh solution is none other than resorting to Bitcoin. As an alternative asset that can guarantee global economic stability, while avoiding the manipulations to which traditional fiat money is subjected.
To which the millionaire and shark tank Mark Cuban responded, accepting that Pysh’s analysis of the world financial system is correct. But highlighting that his vision of the utility of Bitcoin is not. Well, Mark Cuban questions the role of Bitcoin as a new virtual currency, in a answer Pysh, and those who support his vision:
“(Bitcoin) can be a store of value. But the conversation began with the challenges of the current Federal Reserve system. You are not wrong about the system. But you are wrong about the fungibility of the BTC and its ability to impact society as a replacement for the current system“
Thus, Mark Cuban would show that although he agrees that the world financial system is going through a crisis. Which the Coronavirus has done nothing but speed up. Keep questioning that Bitcoin may ever replace our current system. Not having the fungibility and liquidity capabilities that traditional fiat money does.