American economist and Nobel Prize winner in Economic Sciences Milton Friedman has aptly predicted the rise of digital currencies like Bitcoin in 1999.
In his claim, Friedman said that a reliable but discreet method of financial transactions will develop on the Internet in the near future.
In an interview conducted by NTU/F in 1999, Friedman said:
“The one thing that’s missing, but that will soon be developed, it’s a reliable e-cash. A method where buying on the Internet you can transfer funds from A to B, without A knowing B or B knowing A. The way in which I can take a 20 dollar bill and hand it over to you and there’s no record of where it came from. And you may get that without knowing who I am. That kind of thing will develop on the Internet.”
Bitcoin’s role in economics
Friedman was considered among the most well-known and influential economists in the 20th century. He was a strong advocate of liberty, free markets, as well as free enterprise. He also led the Chicago School of Economics in Illinois.
Friedman studied at Rutgers University, where he specialized in mathematics and economics. He graduated from the university in 1932. During his time at the school, however, he was influenced by economics professors Arthur F. Burns and Homer Jones.
In the 1960s, Friedman vigorously opposed the Keynesian economic policies of the US government. Bitcoin, meanwhile, is a digital payment system and a cryptocurrency that was launched as an open-source software in 2009.
It is considered as the first decentralized digital currency in the world because it effectively works without the need of a central repository or a single administrator.
Based on a study published by Cambridge University in 2017, there are already around 2.9 to 5.8 mln users of cryptocurrency wallet around the world with a majority of the users reportedly using Bitcoin.