Author: Daii Source: mirror

Today's title is inspired by an article from 30 years ago in the American magazine Newsweek called "The Internet? Bah!"

Bitcoin has now dropped below 80,000, and you will soon be surrounded by all kinds of criticism and questioning of Bitcoin. My article aims to act as a 'thought vaccine' to help you get used to this.

Although the title of the article is a bit sarcastic, the topic we are going to discuss today - economic demand - is quite academic.

The reason we are talking about this very academic topic is that a heavyweight expert has taken the opportunity of the big drop in Bitcoin to talk down on it, using a very academic tone, saying that "Bitcoin has no real economic need".

This expert is called Jürgen Schaaf, an advisor to the European Central Bank. In an interview with Cointelegraph, he said that "the idea of national-level Bitcoin reserves is a very risky one". Although it is reasonable for governments to maintain reserves of resources like oil and gas, "Bitcoin has no real economic need" because this cryptocurrency has no "actual economic necessity or relevant use".

1. Bitcoin's "big drop" echoes "no economic demand"

Clearly, he is saying this to deny that Bitcoin can become a reserve asset for central banks. Because previously, the governor of the Czech central bank had expressed the opposite view to him.

To support his view, Schaaf also pointed out other shortcomings of Bitcoin, such as extreme volatility, potential illegal use, and susceptibility to manipulation. He believes that Bitcoin is not suitable as a central bank reserve asset because it cannot provide a guarantee for monetary stability, but may instead fuel speculative behavior and wealth redistribution.

As an advisor to the European Central Bank, Jürgen Schaaf has a strong financial background and high authority. His views are widely followed in the industry, because he is not just a theorist, but an important member of the European financial system. As one of the most important financial institutions in Europe, the decisions and positions of the ECB directly affect the economic policies of the entire Eurozone, and Schaaf, as an advisor to the bank, undoubtedly plays a pivotal role in monetary policy and economic governance.

When he made these comments, Bitcoin had just dropped below 90,000 (February 25th), and two days later (February 27th) the price of Bitcoin fell below 85,000 again, and today (February 28th) it fell below 80,000 again, seemingly perfectly echoing Schaaf's view.

But, I don't know if you've noticed, Schaaf's judgment has a fundamental cognitive bias - he equates "economic demand" entirely with the dependence of the industrial society on physical energy. His thinking is still stuck in the traditional paradigm of the 20th century where "oil is power", ignoring the demand shift in the digital civilization era.

2. The value of Bitcoin comes from a new system

The emergence of Bitcoin is not to meet the "use value" in the traditional sense, but to deconstruct and reconstruct the global consensus on value. Bitcoin's contribution to human civilization will far exceed that of oil.

Bitcoin is rewriting our definition of "demand". It represents not a dependence on physical energy or traditional financial tools, but a deep need in the digital age for trust, decentralization and security. Just like when the Internet was first born, it was also questioned "can't produce food", but it was the Internet that drove the global flow of information, innovation and economic development.

Bitcoin has created a value transfer system that can cross borders, be decentralized, and require no trust, which is almost unimaginable in the traditional monetary system.

Especially in developing countries, Bitcoin has become a financial haven for many people. Particularly in the face of hyperinflation and currency devaluation crises, many households have started to use Bitcoin to preserve their wealth.

In Argentina, the peso has depreciated rapidly in recent years, and many citizens and businesses have chosen to convert their funds into Bitcoin to cope with the rising inflationary pressure. Statistics show that the Bitcoin adoption rate in Argentina is already close to 10%, and in Venezuela it is even higher, exceeding 20%. These figures reflect the huge "economic demand" that Bitcoin represents for the people of these countries.

In Venezuela, an ordinary family started investing in Bitcoin in 2016, and over the years their funds have appreciated by over 4000%. Bitcoin has helped them not only preserve the wealth that would have evaporated in currency devaluation, but also create wealth appreciation opportunities.

In Nigeria, despite the Nigerian government's repeated adjustments to the regulatory policies on cryptocurrencies (including the 2021 banking ban and the 2023 policy relaxation), the trading volume of Bitcoin has continued to grow, reflecting the strong public demand for it. Of course, the Nigerian government is furious about this and has taken Binance to court in the country, claiming $79.5 billion in damages.

Furthermore, Bitcoin's decentralized nature has given it powerful cross-border payment capabilities globally. According to data, the user growth of Bitcoin cross-border payments has exceeded 200% from 2018 to 2023.

Of course, not everyone sees Bitcoin's potential, just as the value of the Internet was not fully recognized in 1995.

3. The Lesson of "The Internet? Bah!"

The famous article in Newsweek is known for its pessimistic predictions about the Internet. It questioned the business potential and social value of the Internet, and made the following specific criticisms:

"No online database will replace your daily newspaper." - Questioning the threat of the Internet to traditional media.

"No CD-ROM can take the place of a competent teacher." - Doubting the role of technology in education.

"No computer network will change the way government works." - Denying the impact of the Internet on politics.

"We've been promised instant catalog shopping - just point and click for great deals. We'll order airline tickets over the network, make restaurant reservations and negotiate sales contracts. No more brick-and-mortar retail stores. So how come my local mall does more business in an afternoon than the entire Internet handles in a month?"- Questioning the feasibility of e-commerce.

Now you know that all of the above criticisms have become reality.

Clifford Stoll, the author of the article, is an astronomer who is 74 years old now. Stoll is not a stubborn old man. He reflected on his own article as early as 2010 and acknowledged his mistakes.

The reason for bringing up Stoll's article today is that it perfectly reflects the current logic of criticism against Bitcoin.

When the European Central Bank advisor Jürgen Schaaf declares that "Bitcoin has no real economic need", the essence is the same as Stoll's denial of the business value of the Internet - using the "demand" framework of the industrial civilization to define the paradigm revolution of digital civilization.

Just as Stoll could not imagine Amazon's trillion-dollar market value, traditional financial elites also find it difficult to understand the new economic demands created by Bitcoin, such as "censorship-resistant transactions", "algorithmic trust" and "time sovereignty", and how much productivity they will unleash.

Conclusion

History never repeats itself, but it always rhymes.

The value of all disruptive technologies will eventually take root and grow in the cracks of the old paradigm.

The plunge and doubts about Bitcoin are like the darkest moment when the Internet bubble burst. In 2000, the Nasdaq index plummeted 78%, and Amazon's stock price shrank by 95%. The Wall Street Journal declared that "e-commerce is destined to be a flash in the pan". But 24 years later, the global e-commerce transaction volume has exceeded $6 trillion, and Amazon's market value is 30 times its peak value.

Price fluctuations can never negate the value revolution, just as a tsunami cannot negate the existence of the ocean.

The steam engine did not bring faster carriages, but the entire railway era; Bitcoin is also changing not the existing currency, but a new value network based on mathematical consensus.

Looking back from 2025, Stoll's misjudgment is always a reminder to us:

The true power of a technological revolution has never been in what it replaces, but in what new continent it creates.