Assessing the Ethical Implications of Bitcoin and Fiat Currencies
Summary:
The article discusses the ethical issues surrounding cryptocurrencies and fiat currencies. Charles Adams from Nickel Digital Asset Management claims that despite both having ethical challenges, Bitcoin holds a slight advantage due to its inherent inclusiveness, transparency, and immutability. Both Matteo Greco, research analyst at Fineqia, and Caroline Bowler, CEO of BTC Markets, agree that the ethics of currency usage depend on the individual rather than the monetary system itself. Moreover, Sergey Sheleg, chief product officer of Nicegram, urges the implementation of safeguards by institutions for the ethical use of currencies, irrespective of their form.
While both cryptocurrencies and traditional monetary systems vie for the title of the more ethical form of money, they both face ethical challenges. Bitcoin's detrimental effects on the environment via energy-intensive mining, its possible use by criminals, and an absence of systematic user protection are some criticisms of its ethical shortcomings. Traditional fiat money, however, has also been targeted by critics, citing a lack of a physical commodity such as gold underpinning its value and a potential to cause societal harm through uncontrolled printing by central banks.
Charles Adams from UK-based Nickel Digital Asset Management maintains that both types of currencies have ethical issues, but Bitcoin has a slight ethical advantage because of its inherent inclusivity, transparency, and the inability to change its records. He also highlights that traditional money is not exempt from illicit activities and is often the go-to medium for various crimes.
Different from anonymous payments, Bitcoin transactions are pseudonymous and can be traced effectively by law enforcement and cyberspace investigators. Adams opines that Bitcoin’s inherent transparency and potential positive societal impact deem it a suitable contender as an alternative global currency.
Fiat currency often garners criticism as it can cause economic disparity due to hyperinflation, as seen during Zimbabwe’s economic crisis in the 2000s. Critics suggest that currencies anchored by gold are more stable because, unlike fiat, their supply is limited. Adams, however, proposes a co-existence of both currencies rather than an elimination of one.
Fineqia's research analyst, Matteo Greco, believes the abuse of money occurs not because of the type of currency but the deeds of the individuals handling them. He observes that ethical usage depends on the intent of the users.
Irrespective of the ethical implications, Bitcoin miners continue to minimise their environmental footprint by sourcing electricity from renewable energy. Greco further dismisses criticisms against Bitcoin’s energy consumption, arguing that sectors like social media also consume vast amounts of energy.
CEO of Australian crypto exchange BTC Markets, Caroline Bowler, holds that the moral standing of currencies is dictated more by the deeds of those who control and manipulate them than the currency technology itself. Both Bitcoin and traditional currencies can be used in an ethical or unethical manner, based on the users.
Highlighting the importance of promoting transparency, accountability, and responsibility among individuals, institutions and governments, Bowler believes the realisation of Bitcoin's potential lies in its responsible use.
Sergey Sheleg, chief product officer of the Web3 social platform Nicegram, dismisses debates around the "ethics" of fiat and Bitcoin, suggesting that the ethical aspect of a currency depends on the implementation of safeguards by those managing it. He holds that the ethicality of a currency extends beyond its form to the processes and policies around its use. He thus calls for leveraging the strengths of both currencies to build a more equitable financial landscape that benefits all.
Published At
6/10/2024 4:31:00 PM
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