The author of the latest Economist’s article regarding cryptos and blockchain argues that the former are of no use, while the latter still have something to offer despite the surrounding hype. Is such a statement relevant?
A «Techno-Anarchist Project» At Failure
The Economist’s article «Bitcoin And Other Cryptocurrencies Are Useless» points out the problem of inconsistency between the expectations of the most known cyber coin and the reality it is facing 10 years after been launched.
The magazine’s Technology Quarterly states that there is no rational way to assess bitcoin’s genuine value due to speculation rage. Staring from zeros, in December 2017 the ‘big daddy’ surged up to $20,000 after seeing many slippery slopes and downward trends. After all, it lost over 65% of its value since then.
Initially, however, bitcoin was supposed to hold the value as an online version of fiat money. It would allow people to send money to each other with no need for a third party’s paid help, for example, various financial institutions like banks or governments which are in control of the money flow in the country. In the Economist’s article, it is disputed that bitcoin is used for the same purposes nowadays.
In our own time what ordinary users get is a struggle with sophisticated software and give up on the clients’ protections. The piece assumes «the security is poor,» but bitcoin case is not the worst — it says its ilks are used even less than bitcoin itself.
A Magnet For Speculation
The article singles out that the cryptos have little to offer but they are a magnet for speculation. It is noted that whereas some investors have gained considerable earnings, the others lost a lot. Interestingly, that’ the point which had been earlier expressed by Warren Buffett, a billionaire and a known opponent of cryptos.
Not everyone agreed with Buffett, though. His disciple and a venture capitalist Chamath Palihapitiya admitted his guru was wrong regarding bitcoin, while others countered the billionaire’s words that bitcoin has no value saying that it does. And bitcoin’s value is that it helps develop the blockchain network on the market of cryptos.
The Economist, in the meantime, is taking a hardline stance against the coin. It refers to specialists’ definition of a currency and says bitcoin fails to suit it. A real currency can be a store of value, a medium of exchange and a unit of account at a time. The magazine, though, says that cryptos cannot be all this because of their volatile nature and the lack of adoption. And even though it assumes that cryptos may still survive, they still resemble «untrustworthy casino.»
Not Likewise DLT
At the same time, the Economist gives out to the blockchain, a technology which underpins bitcoin and can be applied in various spheres of human activity — from finance to medical record and identifying the documents of refugees.
The main argument is that the hype also surrounds blockchain but it does not mean insteps DLT from well-functioning. Blockchain can rival such payment services like SWIFT, Stripe and others, but, the paper concludes, and there were rumours it was used for the elections in Sierra Leone.
Nevertheless, the paper concludes, blockchain has a lot of potential, not likewise cryptos.