Tobey Karen Scharding, a professor at Rutgers, says Bitcoin is an “unethical investment” as it undermines the value of national currencies.

When people talk about Bitcoin and other cryptocurrencies, the discussion is usually focused on their usefulness. There’s lots of chatter about transaction speeds and fees, as well as where you can actually spend your cryptocurrency. Of course, the current price is always a major topic of concern. However, a Rutgers professor has taken a different tack by musing about the ethics of Bitcoin.

Is BTC Fiat?

Tobey Karen Scharding is a fellow at the Rutgers Business School Institute of Ethical Leadership and a visiting professor to the university. She is intrigued by the ethical consequences of the world’s foremost cryptocurrency.

She declares that BTC is a “token of value” due to the fact that it gets its value by consensus agreement and not from a centralized government. Scharding states that cryptocurrencies could be considered fiat as people have agreed they have value, although she adds in some qualifiers. She says:

Calling it a fiat currency makes it seem that the value or the specific exchange value is more up for grabs than it actually is. The U.S. dollar is a fiat currency as well, but that doesn’t mean that we can just change its value just because we changed our minds about what it’s worth. It involves a lot of different factors.

The Ethics of Bitcoin

Scharding examines if Bitcoin is ethical by its role in advancing people’s lives while working in a civilized society. In her view, BTC does help some people, but other factors contribute it to being unethical.

She says:

One of the ways it falls short is that it’s not regulated by a government or a bank like most national currencies. It works to secure that everyone in the community using the currency has access to goods and services, and that the currency will have value ensured by those regulating it.

Another failing for BTC in the eyes of Scharding is that it won’t become a globally recognized currency due to the fact that the vast majority of people will not give up the security offered to them by fiat issued by a central government. She even states that cryptocurrency can devalue national currencies, saying:

I’m personally confused by the idea of a country globally recognizing and adapting a cryptocurrency as opposed to their own. It’s just baffling to me that places like Venezuela would even entertain that idea.

Overall, she considers BTC to be an “unethical investment” as there’s no reassurance offered to those that invest in it, not to mention if its value will be retained. She concludes her thoughts by saying:

It’s unethical because of how it undermines the value of national currencies, and to the extent in which national currencies undermine the safeguard of millions of people. That’s the real danger of Bitcoin.

Using ethics to throw FUD at cryptocurrencies is something new. First, she totally ignores market forces. The reason why anything has value is due to enough people (a consensus) agreeing that it has value. It does not take 100 percent acceptance for this to occur. Just look at modern art. There are plenty of people who find modern art atrocious, but there are enough individuals who are enthralled by it and are willing to value such works in the tens, or hundreds, of thousands of dollars.

It’s also funny that she brings up Venezuela. The value of that country’s currency collapsed due to the socialist policies of the central government, not by the introduction of Bitcoin and other cryptocurrencies. Last year, the inflation rate in Venezuela hit over 830,000 percent! The government eventually lopped off five zeroes from the denominations to make handling the fiat feasible. There are plenty of countries that have rampant inflation of their national currency that make life very hard for their citizens.

Overall, Bitcoin and other virtual currencies are a means to an end, just like fiat. It is not good or bad on its own but rather how it is used. The fact that crypto is providing newfound economic opportunities for millions of people around the world should not be discounted.

Do you think BTC is an “unethical investment” or not? Let us know in the comments below.

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