Cryptocurrencies are Not Currencies at all Unless they Show Stability, says Yale Professor
The first cryptocurrency, Bitcoin was launched way back in 2009. Since then it has gone on to become one of the most talked about assets in the financial industry. The advent of Bitcoin inspired other blockchain based cryptocurrencies to emerge in the market, creating a separate market from other financial assets.
However, cryptocurrency has never got approval from academicians. They have time and again criticized digital tokens and have raised their concerns over their validity.
Recently, a prominent scholar, William Goetzmanm, the professor at the prestigious Yale University, stated that cryptocurrencies can never be considered as currencies until they show stability. In an interview, Prof Goetzmann criticized Bitcoin for having “flaws in its fundamentals”, however, he accepted that there is a growing demand for a mode of transferring and storing a value outside the global banking system.
Prof Goetzmann opined that some of the primitive money was similar to cryptocurrencies, transactions were done solely on accounting ledgers. Similarly, he added, bitcoins are not physical but only accounting transaction. He further stated that there are certain prerequisites which need to be met before anything is to be qualified as ‘currency’.
Bitcoin and other cryptocurrencies have been quite unstable in the past few months. The world’s largest cryptocurrency reached its peak in December 2017, when its price increased to a jaw-dropping $19,783. However, the following year was the worst for digital assets. Bitcoin kept bleeding for six consecutive months, finally breaking the streak in February 2019. Other digital tokens, too, faced bearish market trends throughout last year.
Sudden shifts in price have been a nagging issue for cryptocurrencies, and they still haven’t figured out a way to overcome it. In some ways, other digital tokens are gaining stability but not Bitcoin.
The rise of cryptocurrencies and blockchain, in general, has compelled several traditional behemoth corporations to enter the crypto space. These corporations include IBM, Facebook, HSBC, TCS, JPMorgan, and others. Entry of such established stalwarts shows that the cryptocurrency game is far from over, however, there is serious need of revamping the industry. Cryptocurrency has come into life as a mode of alternate payment but soon it was known as a popular token for investment. The industry was not prepared for this, and hence, clouds of uncertainty always hovered on it.
Nonetheless, affordable cryptocurrencies like Tron (TRX) and BitTorrent Token (BTT) are gaining fast traction in the market, as they are much more convenient than Bitcoin. In recent years, blockchain and cryptocurrency have played an important role in creating is a substitute for traditional banking in a day to day operations like transferring money abroad. Several money transfer platforms based on blockchain have emerged in the past couple of years, which facilitate the transfer of money in a much cost-effective manner, taking lesser time than banks and other traditional options like Western Union and MoneyGram.