Experts warn: Bitcoin won't last much longer

Eswar Prasad, a senior professor of international trade policy at Cornell University, told CNBC in early December that 'Bitcoin itself may not be around for long.'

The price of Bitcoin has fluctuated wildly over the past few years. In the last month, the price of a coin has dropped from around $58,000 to less than $46,000. At 10:15 p.m. on December 17, the price of Bitcoin was $45,637.

Previously there were only a few cryptocurrencies, but now there are hundreds of cryptocurrencies. Some of them are more useful and eco-friendly than Bitcoin.

Blockchain is the underlying technology of most cryptocurrencies. In essence, blockchain is a digital "ledger" of cryptocurrency transactions distributed across a global network of computers.

Prasad, author of "The Future of Money: The Digital Revolution That Is Transforming Money and Finance", said: "Bitcoin's blockchain technology is not very efficient."

He explained that this cryptocurrency uses a transaction verification mechanism that is devastating to the environment and does not scale well. Indeed, Bitcoin emits more carbon than the whole of New Zealand.

Prasad said some new cryptocurrencies use blockchain technology much more effectively than Bitcoin. He believes that blockchain technology will transform the way finance is run and the way people perform everyday transactions like buying a house or buying a car.

Prasad argues that Bitcoin is not an efficient means of transaction. Bitcoin will not have any fundamental value beyond the confidence investors place in it.

More generally, cryptocurrencies have "lighted the fire" for central banks to start thinking about issuing digital versions of currencies.

The professor added that such digital currencies can be beneficial as they provide a low-cost payment option accessible to everyone, increasing financial inclusion and stability. finance.

Prasad concludes: 'While you may not like Bitcoin, this currency has really created a revolution that can ultimately benefit all of us in a direct or indirect way.'

Jessica Tanner

Update 18 December 2021