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Econ­omist William J. Luther speaks at a Praxis event about the future of Bitcoin, a digital cur­rency. Evan Carter | Col­legian

Econ­omist William J. Luther said he doesn’t think the dollar will be chal­lenged by the Bitcoin or any other digital cur­rency any time soon.

In the Jan. 9 talk held by Praxis, Hillsdale College’s eco­nomics club, the assistant pro­fessor of eco­nomics from Kenyon College said he thinks Amer­icans will con­tinue to use dollars, even while financial insti­tu­tions adopt some of the tech­nologies used in Bitcoin trans­ac­tions.

“I think we will adopt that tech­nology in one way or another, that is we’ll use that tech­nology to process dollar trans­ac­tions,” Luther said. “Most people just aren’t inter­ested in using some new money and so they won’t.”

The blockchain, which Luther described as a sort of public ledger, dis­tributes trans­ac­tions across the entire network of cur­rency users without the need for a third party. Tra­di­tional financial trans­ac­tions all require money transfers to go through a third party, making them more expensive.

But while Luther said he doesn’t believe Bitcoin or its com­petitors will dis­place the dollar, he said he believes it could be a viable option in coun­tries like Venezuela, where their cur­rency is hyper­in­flated.

Luther also said Bitcoin may get over­taken by another digital cur­rency in the future.

“I liken it to 1998,” Luther said. “You know search engines are going to take off but which search engine? How many people would have selected Google — I would have put my money on Ask Jeeves.”

Junior Summer Burk­holder, who said she didn’t know much about Bitcoin before attending the talk, thought the talk was very infor­mative and appre­ciated that Luther gave both the pros and cons of Bitcoin. Still, she doesn’t plan to pur­chase any cryp­tocur­rency.

“I would like to keep my money,” Burk­holder said. “Maybe if I was a little richer.”

Freshman James Millius said he appre­ciated learning how the digital cur­rency actually works.

“A lot of people know it as some eso­teric cur­rency that lots of people like to use,” he said. “Actually learning how the cur­rency func­tions was inter­esting to me.”

Millius said he would buy Bitcoin, if he had more money, too.

Praxis Pres­ident junior Emma McCormick said the talk was the first of five talks Praxis is holding this semester. The next will be from Steven Horwitz on inequality and income mobility in America on Feb. 22.

  • Sun Drez

    Evan this is a good article. I will state William Luther is narrow minded and has no insight. Bitcoin will be used for a storage of value and will hit astro­nomical levels.

    Bitcoin will become the new gold standard.

    Ether will also do amazing as the first reg­u­lated and cor­porate blockchain.

    Anyone who is reads this and does not under­stand the impor­tance of security will never under­stand.

    Bitcoin will surpass $3,000 USD this year easily.

  • There have been so many “Obit­u­aries” over the years pre­dicting the death of bitcoin (there is even a website — google it — that so far con­tains over 100 from “experts”) but each time bitcoin rises renewed and regen­erated. The Rat would rec­ommend all Col­le­gians read up as much as you can about this ground-breaking inno­vation in how decen­tral­i­sation can verify digital proof of exis­tence without the need for any third party or central authority.

  • Chad Doe­belin

    It’s sad that at the talk William just spread mis­in­for­mation about bitcoin. People left thinking that they can’t afford bitcoin, not under­standing that you don’t have to pur­chase an entire bitcoin, or that they are broken down into satoshi with eight decimal places.

  • Peter Lan­gelaar

    I think he is not as smart as he looks … Banks will drop and why ? They invest money in wars , weapons , big­pharma etc etc …people who are aware about the ask­inazi jews con­trolling the world with their banks will go to coins like bitcoin ‚zcash etc etc …big elite mafia is behind fiat money that enslaves humanity …we have to get rid of these par­a­sites that rule 99% of the people in the world .… Bitcoin and other cryp­tocur­rency is the best option to take down their little game.… Just start this cryptocoinrevolution.com and become your own bank by start mining your own bit­coins.

    • Claudiu Gafton

      Great post! BRAVO

      • Peter Lan­gelaar

        Thanks

  • Emma McCormick

    I think there is a mis­un­der­standing between Bitcoin dying and America replacing the dollar with Bitcoin. Bitcoin will not die, and Luther isn’t arguing that it will. Rather, Bitcoin will not be able to overcome the huge network barrier of replacing the current fiat cur­rency (in other words, because not everyone uses Bitcoin and it isn’t accepted in all trans­ac­tions, not everyone has a reason to switch to Bitcoin, and they won’t until everyone does, which circles right back to the original problem). The block chain is here to stay, but so is the dollar.

  • Paul Bond

    Made me laugh when com­paring to search engines “Google or Ask Jeeves?”

    He forgets that in the 28Kbit modem days, adver­tising was killing load speeds. Google won because it was *fast* and it was *simple*.

    When you can make a trans­action quicker than pulling the correct fiat notes out of your wallet to make a payment will be the day fiat dies.

    I would also argue that the petro-dollar is already dead, it just doesn’t know it yet. If they replace it with a US dollar instead of an inter­na­tional dollar then they can reset their game and start again, but they’ll be several blocks (‘scuse pun) behind it that point.

  • Jan Jansen

    Ive heard the search engine com­parison before. Its flawed. There is no penalty to switching search engines, you can use any one you like, you just pick the best at any time as there is no network effect. With crypto, there is a huge network effect. Think facebook. You can make a better social network, but no one will switch to it because the chicken and egg problem. Or, since bitcoin is a pro­tocol, a slightly less flawed com­parison would be internet pro­tocols. Sure, some might have bet on gopher, but most would have seen HTTP was there to stay.

  • Russell Spears

    This is what happens when people in big places make pre­dic­tions about a tech­nology they don’t under­stand.

    Bitcoin is not going to get replaced by a better coin, because any better coin that threatens Bitcoin will be part of Bit­coins new update.

    Experts have always been capable of pro­viding ratio­nal­iza­tions for gov­ern­ments and for other quasi total­i­tarian insti­tu­tions..

    If Bitcoin becomes big I would predict that people who did not under­stand Bitcoin and are related to eco­nomics or finance will be irrel­evant.
    .…. and this pre­diction is coming from a nobody

  • Andy Tron

    lol i guess this so called econ­omist guy doesnt know that bitcoin has died 120 times already… https://99bitcoins.com/obituary-stats

    aren’t these guys tired of being wrong?lol make that 121 times if we include this article lulz

  • Camus53

    Inter­esting to note so many…so, so many indi­viduals arrested and con­victed for bitcoin trans­ac­tions con­nected with so many nefarious and illegal activ­ities.

    Want to attract the attention of the US Government…let alone other inter­na­tional agencies? Start dab­bling in bit­coins. It’s not “someone is watching you”…more like EVERYONE is watching and mon­i­toring you.

  • Doc­Scrapper

    The headline is mis­leading. Nowhere in the article does William Luther predict that bitcoin will “die.” Yes, he expresses skep­ticism about bitcoin replacing the dollar, but he acknowl­edges that bitcoin “could be a viable option in coun­tries like Venezuela.”