20.10.2021

Harvard professor sees no prospect for Bitcoin’s success

Bitcoin is often positioned as a store of value and a hedge asset that is able to preserve investor funds even in bad conditions for the global economy.

Over the past few months, the asset has surprised with its meteoric growth, but Kenneth Rogoff, a professor of public policy and economics at Harvard University, still doubts the success of the main cryptocurrency. Consider his main theses in criticism of the main cryptocurrency.

To begin with, we note that Kenneth Rogoff has criticized cryptocurrencies not for the first time. For example, back in December 2018, he argued that Bitcoin is essentially a lottery ticket – but only very expensive. Thus, the economist hinted at the meaninglessness of cryptocurrency, which supposedly could only deprive the investor of his funds.

Then he talked about the use of cryptocurrencies in criminal activities and predicted a tighter regulation of this niche by the authorities. Today he voices the same thoughts, that is, in fact, in two years the professor has not figured out the advantages of cryptocurrencies. And this is strange – especially considering the considerable number of world-famous companies that have invested hundreds of millions of dollars in BTC during this time.

What’s wrong with Bitcoin?

Rogoff explained his point of view in a recent interview with Bloomberg. Here is his line, quoted by Cointelegraph.

It’s possible, you know, Bitcoin could find some use in a dystopian future. But I think that governments are not going to allow pseudo-anonymous transactions on a large scale. They just won’t allow it. Bitcoin regulation is bound to happen. Governments will benefit. It doesn’t matter what kind of technology it is.

That is, the economist believes that ultimately the cryptocurrency industry will be completely regulated by governments, with the result that users will not be interested in them. But the drop in demand will supposedly affect the cost, which is unlikely to hold out at the top.

We believe Rogoff is wrong even in his basic theory, as no one will be able to regulate the cryptocurrency industry entirely due to its decentralized nature. As you know, transactions on the coin network do not lend themselves to censorship, and there is no body that would approve transfers. Yes, cryptocurrency exchanges are able to freeze the wallets of unscrupulous users or fraudsters, but this is where it ends. For example, officials and bankers cannot influence the Uniswap decentralized exchange, because it works on the basis of smart contracts.

Here is a transcript of a conversation with an economist. We recommend watching if you understand English by ear.

Note that dislikes predominate under the video, which indicates a corresponding attitude towards the professor’s statements on the part of the audience. The video itself is called “Bitcoin skeptic Rogoff says cryptocurrencies will be regulated” – which in itself sounds like a negative towards the blockchain asset industry.

There are plenty of funny statements in the comments column. Here is some of them.

“Is Bitcoin valuable because people believe there is value in it? It’s just a bubble. ”

Hell, sounds like a dollar description.

Another comment from the audience.

The average boomer cannot understand modern economics.

Rogoff does not take into account the unprecedented growth in Bitcoin’s value over its twelve years of existence. In general, criticism at the moment when such an asset shows profitability in the amount of tens of thousands of percent sounds extremely unconvincing. Moreover, the words about the alleged total ban or containment of the development of BTC also do not have any logic under them: nevertheless, now more and more large financial organizations are investing in the crypto market.

One way or another, the expert considers the crypto only as a tool for short-term speculation. Here is a quote from him.

I’ve been skeptical about Bitcoin for a long time. Its price has risen, but a kind of final question remains – what is the use of cryptocurrency? Is it growing simply because people find it valuable? This is a bubble that is about to burst.

Here it is worth remembering the story of a guy who bought ethers many years ago at a rate of $ 2. The day before, he sold all his stock of coins and became financially independent. And this confirms that it is possible to deal with cryptocurrencies for a long time – naturally, if the blockchain project itself is reliable and promising.

We believe that such statements by famous professors once again remind of the complexity of the cryptocurrency industry. Because of the latter, it is much easier for some experts to call what is happening in the niche a bubble than to deal with blockchain innovations like the security system in Ethereum 2.0. In addition, they do not understand the peculiarities of decentralized technologies, and therefore make deliberately incorrect predictions about the massive regulation of the industry.

I would like to believe that over time, even their opinion will change. This will be facilitated by the influx of new large players into the niche. The latter are enough even now.

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