The BIS, which is often dubbed the central bank of central banks, released a chapter from its upcoming annual report on Sunday dismissing bitcoin as “a poor substitute for the solid institutional backing of money.” “Trust can evaporate at any time because of the fragility of the decentralised consensus through which transactions are recorded,” the report said.
“Not only does this call into question the finality of individual payments, it also means that a cryptocurrency can simply stop functioning, resulting in a complete loss of value. “Moreover, even if trust can be maintained, cryptocurrency technology comes with poor efficiency and vast energy use.
Cryptocurrencies cannot scale with transaction demand, are prone to congestion and greatly fluctuate in value.” Much was made of the energy usage point.
Bloomberg ran a headline stating that bitcoin could “break the internet” if used at a national scale. Energy usage is a serious issue for bitcoin, which requires ever greater levels of computing power to validate transactions on its network.
Bitcoin mining currently uses about as much electricity as Switzerland, according to BIS. But crypto advocates say that this — and BIS’s other criticisms of bitcoin and cryptocurrencies — misses the point. Read more from businessinsider.com…
thumbnail courtesy of businessinsider.com