Tags in this story
Bitcoin defect, Bitcoin transaction medium, Bitcoin mining, Bitcoin payment, Cornell University professor, Cornell University, encryption flaw, cryptocurrency flaw, Eswar Prasad, mining energy use, professor of economics
Eswar Prasad, professor of economics at Cornell University and former head of the China branch of the International Monetary Fund, believes that Bitcoin has three major flaws. Because of these shortcomings, the professor said, “Bitcoin has indeed triggered the search for better alternatives.”
Cornell University economics professor Eswar Prasad talked about the flaws of Bitcoin in an interview with CNBC on Thursday.
Prasad is the Nandlal P. Tolani Senior Professor of Trade Policy and Professor of Economics in the Charles Dyson School of Applied Economics and Management at Cornell University. He is also a senior fellow of the Brookings Institution. He used to be the Director of the Financial Research Division of the Research Department of the International Monetary Fund (IMF) and previously was the Director of the China Division of the International Monetary Fund.
The first flaw is related to the energy use of Bitcoin mining, which Prasad said is “definitely bad for the environment”. The professor pointed out that, in contrast, Ethereum is proposing a method, “This will greatly reduce energy intensity, and can provide many benefits that Bitcoin should provide.” He added:
It can also make transactions cheaper and faster.
The second point raised by the professor is that Bitcoin is not so anonymous after all. He cited the Colonial Pipeline case, where law enforcement claimed to have recovered $2.3 million in Bitcoin. He pointed out that other cryptocurrencies may provide more anonymity than BTC, such as Monero and zcash.
According to the professor, the third flaw is that Bitcoin cannot be used as a currency. He described BTC transactions as “slow and cumbersome” for payment, adding that its market is very volatile and cryptocurrency has become a speculative asset. Prasad concluded:
Therefore, Bitcoin has indeed triggered the search for better alternatives, and people seem to be looking for a medium of exchange that does not require them to go through trusted institutions such as the government or commercial banks-but that is not the case.
Do you agree with the professor’s point of view? Let us know in the comments section below.
Image Source: Shutterstock, Pixabay, Wikimedia Commons
Disclaimer: This article is for reference only. It is not a direct offer or invitation to buy or sell, nor is it a recommendation or endorsement of any product, service or company. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author assumes direct or indirect responsibility for any damage or loss caused or claimed to be caused by using or relying on any content, goods or services mentioned in this article.