Cryptocurrencies promise to replace trusted institutions with distributed ledger technology. Yet, looking beyond the hype, it is hard to identify a specific economic problem which they currently solve. Transactions are slow and costly, prone to congestion, and cannot scale with demand. The decentralised consensus behind the technology is also fragile and consumes vast amounts of energy. Still, distributed ledger technology could have promise in other applications. Policy responses need to prevent abuses while allowing further experimentation.
Read BIS Annual Economic Report
Watch Hyun Song Shin explain why – despite all the hype – #Cryptocurrencies are a far cry from money https://t.co/tWw84EviD3 pic.twitter.com/RDywA0LC9c
— Bank for Intl Settl. (@BIS_org) June 17, 2018
Despite the hype, #cryptocurrencies like #bitcoin are not the answer to the increasing need for #DigitalPayments because of their volatile value …1/4 https://t.co/Z9f5mBLrhK pic.twitter.com/JfMB8faFev
— Bank for Intl Settl. (@BIS_org) June 17, 2018
… cryptocurrencies lack scalability to handle the economy’s transaction needs …. 2/4 https://t.co/Z9f5mBLrhK pic.twitter.com/9JwSBIVhfH
— Bank for Intl Settl. (@BIS_org) June 17, 2018
… payments made with #cryptocurrencies are never fully final because of possible rewriting of history through episodes of #forking … 3/4 https://t.co/Z9f5mBLrhK pic.twitter.com/sntmMlwlLq
— Bank for Intl Settl. (@BIS_org) June 17, 2018
… but the underlying distributed ledger technology just might be applied in finance, for instance in trade finance #DLT #Blockchain #TradeFinance 4/4 https://t.co/Z9f5mBLrhK pic.twitter.com/fi9RrhRn1j
— Bank for Intl Settl. (@BIS_org) June 17, 2018
Jospeh Brusuelas, RSM US LLP chief economist, said:
The Bank of International Settlements provides a comprehensive takedown of crypto currencies & rightly points out the shortcomings of bitcoin. If one is a crypto speculator one might want to read the section on manipulation. Crypto has no intrinsic value. https://t.co/txVMeLcBXG
— Joseph Brusuelas (@joebrusuelas) June 17, 2018
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