Let's pick this nonsense apart.
> "Economist Edward Hadas writes in the NYT that developers of bitcoin are trying to show that money can be successfully privatized but money that is not issued by governments is always doomed to failure because money is inevitably a tool of the state.
Money is a tool of trade, valuable because it is sanctioned by its users in society. The success of money is determined only by whether people other than the holder accept it.
Bitcoin seems to be riding a hype, but doing okay just in terms of growing acceptance as a payment scheme for actual products and services.
> 'Bitcoin exemplifies some of the problems of private money,' says Hadas. 'Its value is uncertain, its legal status is unclear, and it could easily become valueless if users lose faith.'
Uncertain value and becomes useless if users lose faith? Sort of like fiat currencies? Except without "quantitative easing" causing inflation to kick the can on fiscal failures from decades of overspending.
The legal status is an open question, and a valid concern. Personally I think it's probably a red herring, but I'd keep an eye on the legal landscape if I was going deep in this.
> Besides, if bitcoin ever really started to take off, governments would either ban it or take over the system says Hadas.
How? What is his criteria for "take off"?
> The authorities might be motivated by a genuine concern about the stability of a shadow monetary system or they might act out of self-preservation because tax evasion would be too easy in a parallel economy.
Didn't this guy just say it would be less stable than official sector currencies? Anyway, tax evasion may be harder with Bitcoin since transactions are public record.
> 'Part of the interest in virtual currencies like bitcoin is that their anonymity can provide a convenient cloak for criminal activity. Part is technological â" this is a cool idea. And part is speculative â" gamblers bet that bitcoin's value will increase,' concludes Hadas.
Part of the interest in legitimate trade is that it provides a convenient cloak for criminal activity.
I think Bitcoin has less anonymity than the author asserts, and protecting privacy on Bitcoin is non-trivial for the average user.
> 'Truly private money is an inferior alternative to the money that comes with the backing of a political authority. After all, no bank or bitcoin-emitter can be as public-minded as a government, and no private power can raise taxes or pass laws to unwind monetary excesses.'"
Gold. It's private, not backed by any authority other than natural scarcity, and was the dominant reserve currency for hundreds of years before modern fiat currencies. We have only had our modern fiat currencies since Bretton Woods in 1971 years and it is already unravelling.
I'm all for valid criticisms of Bitcoin e.g. criticisms of the mathematics behind the artificial scarcity or a murky legal landscape. This guy's comments strike me as vacuous.