30s Summary

Dr. Murry Rudd, of the Bitcoin advocacy group Satoshi Action Fund, responded to a recent controversial report by the European Central Bank (ECB) that was critical of Bitcoin, describing it as unstable, unproductive, and controlled by a few individuals. Rudd argued that the report misunderstood Bitcoin’s focus and its foundational principles of proof-of-work and decentralisation. He also highlighted flaws in the report’s arguments and suggested that the authors – who are developing a central bank digital currency – might have personal interests in portraying Bitcoin negatively. Rudd’s response criticised the ECB for overlooking Bitcoin’s benefits and for lack of academic objectivity.

Full Article

Some crypto experts have recently responded to a controversial report by the European Central Bank (ECB). The bank’s report, released earlier this month, was critical of Bitcoin and was seen as almost calling it a Ponzi scheme. The response came from Dr. Murry Rudd, who is part of the Bitcoin advocacy group, Satoshi Action Fund.

Rudd took issue with how the ECB’s report depicted Bitcoin as unstable, unproductive, and concentrated in the hands of a small group. This response, which came out on October 22, critiques an ECB working paper released on October 12 by Ulrich Bindseil and Jürgen Schaaf. The paper, not so well-received by those who support crypto, painted a negative picture of Bitcoin’s future and its societal impact.

Dr. Rudd argues that the authors of the ECB report misunderstood what Bitcoin’s all about in the first place. They wrongly assumed that Bitcoin shifted its focus from being a payment method to a form of investing, without adequately understanding its technological foundations. These foundations include proof-of-work and decentralization principles.

Dr. Rudd also criticized the ECB report for having several flawed arguments about Bitcoin. For instance, he said the report wrongly claimed that too much Bitcoin wealth is concentrated in a few hands, missing the point that many big Bitcoin wallets are exchanges representing millions of users.

Furthermore, he added that the ECB failed to acknowledge Bitcoin’s utility as a store of value. Nor did they understand the asset’s volatility, which is a typical feature of emerging technologies. The ECB’s critique of how Bitcoin’s wealth is dispersed also overlooked the broader issues with inflation in standard financial systems.

Another point the response makes is the blatant conflict of interest. The authors of the ECB report are involved in developing a central bank digital currency (CBDC), or a digital euro. It would seem that the authors might have some personal interest in making Bitcoin appear inadequate or risky compared to their project.

Dr. Rudd and his co-authors also highlighted the ways in which the ECB report seemed to downplay the significant benefits of Bitcoin. This includes its role in making financial services more accessible to everyone and supporting cross-border payments. They also noted how Bitcoin can be useful for people in countries with unstable currencies and for its innovative uses in areas like energy efficiency.

The real harm, according to Dr. Rudd and his team, is that the bias and weak methodologies of the ECB report undermine its academic objectivity. They conclude that it fails to offer a believable analysis of Bitcoin’s uses or future.

Source: Cointelegraph