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International Settlement Bank Chairman: Bitcoin as a currency has failed

Criticizing bitcoin, the head of the International Settlement Bank called the currency “broken” and said that bitcoin would be destroyed by a 51% attack. His remarks have angered many digital currency enthusiasts.

To Report Speaking on Wednesday about the long-term viability of bitcoin, Agustín Carstens, head of the International Settlement Bank (BIS), said it might take time, but that a 51% strike would eventually cause the world’s major digital currency to collapse. will be.

Carsten’s remarks in an interview with the Hoover Institute are based on his belief that bitcoin, as a currency, an intermediary, and a mechanism for storing value, has failed and remains merely a “speculative asset.” Is not a money.

He also warned those who may be considering investing in bitcoin. “Bitcoin will fall apart,” he said.

Most importantly, investors need to be aware that bitcoin may collapse completely. Scarcity and cryptography alone are not enough to guarantee exchange.

Carstens then turned his attention to the factors with which Bitcoin survives. He cited the “unfortunate side effects” of Bitcoin’s appalling dependence on electricity, which he said was as large as the entire country of Switzerland, home to the International Settlement Bank. According to him, the fire mechanism of proving the work of bitcoin with a large amount of energy is still burning.

The head of the International Settlement Bank also launched a special attack on the scarcity of bitcoins, describing it as an inevitable breaking point of the system, which has a supply ceiling of 21 million units in bitcoin codes. He said offering fewer coins means fewer miners processing transactions and waiting time for approval. [تراکنش] As a result, bitcoin’s vulnerability to “majority attack” will increase.

Carstens added:

Therefore, it is clear that if digital money is to be sustainable, the central bank must play a pivotal role in ensuring value stability, ensuring that the overall supply of this money is stretched, and overseeing the overall security of the system.

Jameson Lopp, chief technical officer of Casa Bitcoin Storage Startup, said in an interview that Carstens’ arguments were inconsistent with the technical realities of Bitcoin.

He wrote in an email:

It is unlikely that Bitcoin will be attacked like any other network, as providing the hardware needed to do so requires a large amount of capital that must be prepared in advance. This is only possible when another network secured by the SHA256 algorithm is created and its extraction is much more valuable than bitcoin extraction.

Nick Carter, a senior executive at Castle Island Ventures, said in response to Carstens’ arguments that being vulnerable does not mean not having money. And it does not matter at all whether bitcoin is money or not, because bitcoin is “a tool to store value beyond time and space.” According to Carter, bitcoin is better than gold in this category.

Carter also said that the bitcoin network’s dependence on energy is a function of value and dissemination, not security and necessity. He added:

Regardless, the cost of energy is well worth it, because having a non-monetary commodity is something that is valuable to the world.


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