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Interviewer: An economist, Mart Thornton, he's a senior fellow at the Ludwig von Mises
Institute. Hi there.
I was going to ask you if you've got any bit coins, but I shan't start with that, that'd be too nosey!
What do you think of this milestone, sir?
-Thornton: Well, I think it's just a matter
time that this bitcoin took over, and what we've seen recently
is that there's a lot more acceptance of bitcoin by
both merchants and by governments. -Interviewer: Even Amazon, this week!
-Thornton: Oh, yes, and even at the Ludwig von Mises Institute we
now accept
bitcoins for donations and bookstore sales. So,
in other countries the acceptant retailers is even greater,
but more importantly government have recognized bitcoin.
They're willing to accept it, they realized that
it's the type of currency going forward in the world
where it's more secure, it's more private,
it's more efficient, and it holds its value better, as well.
-Interviewer: What about that old saying, "what goes up must come down" (at some point)?
-Thornton: Oh, well this is a very, very volatile
medium of exchange. It's not surprising it's very volatile because
it's reacting to world events,
and you know there's 36 other crypto currencies that are also
buying in the marketplace, so we have a lot of volatility to look forward to.
-Interviewer: So, it's not something you kind of want to put your pension in, really, is it?
-Thornton: Well, the people who are putting their money in it are the people who face a lot of
risk.
A lot of people in China are putting their money into it, a lot of people in India
are putting their money into it, and a lot of people in Iran are putting their money
into it because they're facing hyper-inflation
and the prospects for military attack on their country.
-Interviewer: Of course, so the American government and the FBI are looking very closely at it as
well because it has been used as well,
for shady dealing. Drug deals et cetera, et cetera.
-Thornton: Yes, but bitcoin accounts for less than 1/2 of 1% of all its
transactions entirety compared to the
worldwide illegal trade in goods and services. So, it's a very, very small
player,
and actually, it's the US dollar that is the medium
of exchange of choice of criminals around the world.
-Interviewer: We talked about how bitcoin's catching on just now, it's
really catching on in China, isn't it? I guess no surprises, but why particularly China?
-Thornton: Well, the government's accepted it
in full, Chinese merchants have accepted it in full,
and of course there's also been a political turnover. And with that
political turnover, there's going to be reprisals and so some of those
high government bureaucrats are probably putting their money into bitcoin in order
to exit the country.
-Interviewer: Well with the rate it's been going, up and up and up, when do you think it's
going to be snapping at the dollar's heels, do you think?
-Thornton: Well, yes, I think you're going to see much higher prices for bitcoin.
I don't forecast market prices, but I think that
over time you're gonna see bitcoin rising in value because fiat currencies
are continuing to depreciate around the world. We're in a world currency war,
and that spells good things for investors and bitcoin.
-Interviewer: Economist Mark Thornton, thank you for your thoughts. I was nice to have you on the program.
-Thornton: Thank you.