Is a bitcoin economy the future? HARVEY DORSET watches a new documentary claiming it is
What do iconic 90s skateboarder Tony Hawk, conspiracy theorist politician Robert F. Kennedy Jr and NBA winning basketball player John Salley all have in common?
This isn't a wind-up; the answer is that they all appear as interviewees in a new documentary God Bless Bitcoin.
'My perspective is that bitcoin does fix everything,' Salley says in the documentary.
But can bitcoin really fix everything, and what is it exactly that needs fixing?
I headed to a screening of the documentary and expert panel discussion in the hopes of enlightenment.
The UK launch of God Bless Bitcoin comes alongside research indicating that 63 per cent of UK adults have no confidence in the Government's ability to manage the economy.
Documentary creators Brian and Kelly Estes join a discussion panel via video link after a screening of God Bless Bitcoin
The same proportion of young people, aged 18 to 34, said their wages cannot keep up with inflation since it peaked in 2022 and some 14 per cent said their wages haven't increased since 2022.
According to the research, conducted by Onepoll on behalf of the creators of God Bless Bitcoin, 69 per cent of younger Britons are considering using bitcoin as an alternate financial system.
This, in fact, is the aim the documentary. As part of their drive to push a 'peaceful revolution' towards a bitcoin economy, the creators are targeting 500million views of the film in the next four years - and at the time of writing, 1.2million have viewed the film on Youtube.
The main thrust of the documentary, and its creators Brian and Kelly Estes, is that the US monetary system, and by extension that of the rest of the world, is broken, and we can use bitcoin in order to solve it.
Share this article
Speaking in the panel after the screening, via video link from the US, Brian Estes said: 'Bitcoin is the best form of money that humans have ever created.'
The origin of the broken current system, God Bless Bitcoin says, is the shift away from the gold standard in the US in 1971, which led to the devaluation of currency as a result of inflation.
With the gold standard in place, governments' ability to print money was constrained. The proponents say this is much like with bitcoin, which has a limit of 21million that can be mined.
Their idea is that with such a limit, a bitcoin-based economy would be based around a limited supply of money, which the documentary makers say will prevent government from stealing from people as a result of inflation.
The problem is that economists and central bankers like a bit of inflation.
By things being likely to be a bit more expensive in the future, people are encouraged to buy them now rather than hold off and pay more down the line.
In contrast, in a deflationary environment economies run the risk of a slowdown in spending: in simple terms, why would you spend your money today, when you know it will be worth more tomorrow as things will be cheaper.
So if no one wants to spend their bitcoin, what happens? The past might indicate that the deflation this would cause could trouble an economy.
Even so, bitcoin is undoubtedly here to stay, and is still gaining in popularity.
Earlier in the month, a Scottish private school announced it would accept bitcoin for tuition fee payments from next school year. Meanwhile, This is Money last week reported that a UK bitcoin holding company has launched an IPO to build a digital asset reserve and create a UK stock market listed way to access the crypto.
Whether it becomes a global currency remains to be seen.
The use case for bitcoin
Bitcoin does have its uses though.
Lauded by some as a way of dealing with rampant inflation, they say bitcoin allows users to transfer their rapidly devaluing money to it in order to preserve its value.
Nic Carter, general partner at Castle Island Ventures, said in the documentary: 'Bitcoin has been a life raft for those people.'
History shows us that while it may have beated inflation, bitcoin requires people to deal with huge price volatility over the short term though.
Glenn Goodman, author of The Crypto Trader - and an expert This is Money often turns to for a cryptocurrency sanity check - said: 'The documentary makes some valid points about how bitcoin is open for everyone to use.
'Billions of people can't get a bank account, but you don't need a bank account to use bitcoin.
'Governments can't devalue bitcoin as they do with national currencies.
'By printing excessive amounts, they create inflation, which often makes ordinary people poorer.
'In countries like Nigeria and Turkey, many people convert their local currency into bitcoin, because they know their government can't dilute and devalue it.'
In 2021, El Salvador adopted bitcoin as legal tender, and was soon followed by the Central African Republic.
And yet, fewer than 10 per cent of Salvadorans use the Government's Chivo wallet, while 89 per cent of bitcoin companies in the nation are not operational.
The IMF has said the move increases the risk of financial instability.
Meanwhile, the Central African Republic eventually repealed its decision after its top court deemed the move unconstitutional. CAR remains the poorest country in the world.
In the money: Skateboarder Tony Hawk is a Bitcoin advocate
What about the bitcoin whale in the room?
Bitcoin, however, might not be as fair and equitable as it is made out.
Goodman said: 'The documentary doesn't address the whale in the room.
'A "whale" is someone who owns a huge amount of bitcoin, and it's believed these rich people control a large chunk of the existing bitcoin supply.
According to a 2021 study, as little as 0.01 per cent of bitcoin holders control almost a third, 27 per cent, of the 19million bitcoin that were in circulation at the time.
There are currently around 20million bitcoin in circulation, with the supply capped at 21million.
While there are still 1million bitcoin to be mined, it is incredibly expensive to do so.
Just 10 per cent of miners control some 90 per cent of the total bitcoin mining capacity.
Goodman added: 'So for all the talk in the documentary of freedom and fairness, I don't see any suggestion that all the existing bitcoin holders should distribute their bitcoins to the poor and oppressed people of the world.
'If we switched to a global bitcoin economy, presumably all the early adopters would be at the top of the tree right from the start.
'No wonder they're so evangelical about bitcoin in the movie...'
I can't say I've been totally convinced of the possibility of a bitcoin economy. If it does come to pass, it might look good for some, but probably not for you and me.
For Tony Hawk at least, the future of bitcoin is promising. No wonder, with the skateboarder having admitted to buying bitcoin back in its early days in 2012.
'The things that are happening now are things we were only dreaming of when we were on our PCs in computer class in 1985,' he said.
'I'm excited for the future of bitcoin because we are just really beginning to understand all of it, and the uses for it and the advantages of it.'
Rollercoaster ride: Bitcoin has gone from around $65,000 to above $100,000 and slipped back
What's happened to the price of bitcoin recently?
The price of bitcoin soared above $100,000 for the first time in December 2024, much linked to the newly elected US President Donald Trump.
However, it dipped back down to $75,000 as recently as two weeks ago, but is back on the rise, currently sitting at $90,000.
That's a sizeable fall from its peak but a massive gain in recent years.
Just five years ago, it sat at around $7,000 a coin as the Covid pandemic hit - it then reached just over $60,000 before tumbling all the way back to around $16,000.
