Recently, the governor of the Bank of England released a statement about Bitcoin. In his statement, he said that Bitcoin can’t be a real currency because it does not meet all the necessary requirements. Meanwhile, elsewhere in the world, thousands of people are ready to debate his outrageous claim.
Bitcoin Doesn’t Possess the Same Traits as Fiat Currency
During an appearance at Regent University in London, Mark Carney, the Governor of the Bank of England, expressed his opinions on Bitcoin and compared it to fiat currencies. He focused on two major criteria that a currency must possess, and cryptocurrency didn’t quite make the cut. The first criterion is that it must function as a way to facilitate commercial trade and the second is that it must be reliable enough for people to invest their money in it.
According to Carney, it’s nearly impossible for Bitcoin to meet these two basic requirements because Bitcoin’s ridiculously high demand has made it completely useless as a means of trade. Moreover, Bitcoin transactions take far too long to validate, and the costs are also too high.
As for investing in Bitcoin, it remains a highly speculative and risky form of investment due to concerns about regulating and prohibiting the trade of cryptocurrency. In addition to all this, the price of Bitcoin has been in steady decline since December 2017 and it will probably be awhile before we see its price start to stabilize
What About Cryptocurrency in General?
Bitcoin is the most prominent of all forms of cryptocurrency and most experts use it to speak about cryptocurrency in broader terms. As for economist Mark Carney, he has made his pessimism clear about the future Bitcoin and has equally denounced other cryptocurrencies as a “deception in terms of the traditional aspects of money.”
Still, not all of Carney’s ideas check out. He says, “No one uses cryptocurrency as a means of exchange.”, but elsewhere, in India for example, digital currency seems to be catching on for purchasing goods and services notably due to its anonymity.
Moreover, other institutions, such as the Internal Revenue Service (IRS) in the USA, are confident in the future of digital currency on the economic landscape. The IRS believes that cryptocurrency’s digital values are completely functional as a means of exchange, as well as a form of investment.
Confidence in the Blockchain
The Governor of the Bank of England doesn’t see a bright future for cryptocurrencies, however, he is very confident in its underlying technology: the Blockchain. He mostly appreciates the fact that the technology is not directly controlled by any one group of people and offers a safe and secure circulation of information.
Carney believes that Blockchain technology can ensure the reliability of financial transactions in the future. However, it is difficult to envision Blockchain technology playing a major role in the economy without cryptocurrency being involved as well.