Cornell University economics professor and former head of the IMF’s China division, Eswar Prasad, sees three major flaws in Bitcoin. Because of these shortcomings, the professor says that “Bitcoin has really sparked a search for a better alternative”.
Cornell University economics professor outlines Bitcoin’s shortcomings
Cornell economics professor Eswar Prasad spoke about Bitcoin’s shortcomings in an interview with CNBC on Thursday.
Prasad is Nandlal P. Tolani Senior Professor of Trade Policy and Professor of Economics at the Charles H. Dyson School of Applied Economics and Management at Cornell University. He is also a Senior Fellow at the Brookings Institution. Previously, he was Head of Financial Studies in the Research Department of the International Monetary Fund (IMF) and prior to that, Head of the China Department of the IMF.
The first mistake concerns energy consumption in Bitcoin mining, which, according to Prasad, “is certainly not good for the environment”. The professor pointed out that Ethereum, in contrast, is developing a method “that will be much less energy-intensive and that could offer many of the benefits that Bitcoin should offer”. He added:
It could also make transactions a lot cheaper and faster.
The second point the professor made was that Bitcoin isn’t that anonymous after all. He cited the Colonial Pipeline case, where law enforcement officials alleged they had seized $ 2.3 million worth of Bitcoin. He noted that other cryptocurrencies may offer more anonymity than BTC, such as Monero and Zcash.
The third mistake, according to the professor, is that Bitcoin doesn’t work well as a currency. Describing BTC transactions as “slow and cumbersome” for payments, he added that the market is very volatile and cryptocurrency has become a speculative asset. Prasad concluded:
So Bitcoin has really sparked a search for a better alternative and people seem to be looking for a medium of exchange that doesn’t have to go through a trustworthy institution like the government or a commercial bank – but it’s not quite there yet.
Do you agree with the professor? Let us know in the comment section below.
Tags in this story
Bitcoin Errors, Bitcoin Exchange Medium, Bitcoin Mining, Bitcoin Payments, Cornell Professor, Cornell University, Crypto Error, Cryptocurrency Error, Eswar Prasad, Mining Energy Use, Professor of Economics
Photo credit: Shutterstock, Pixabay, Wiki Commons
Disclaimer of liability: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement for any product, service or company. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author are directly or indirectly responsible for any damage or loss caused or allegedly caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
