Economist Kenneth Rogoff of Harvard compares Bitcoin to lottery tickets and says BTC is more likely to be worth $100 than $100,000.
Since its inception, Bitcoin has had more than its fair share of FUD (fear, uncertainty, and doubt) thrown at it. So far, BTC has supposedly died 329 times, and the ongoing bear market is bringing out the nocoiners in droves, cackling in glee as the value of cryptocurrency drops. Kenneth Rogoff, an economics and public policy professor at Harvard, is one such person, and he recently spread some more FUD about BTC and compared it to lottery tickets.
Down on Bitcoin
Kenneth Rogoff was once the chief economist of the International Monetary Fund (IMF), which means he’s a deeply embedded person in the traditional financial system. A system that cryptocurrency seeks to disrupt.
Rogoff says that BTC is “more likely to be $100 than $100,000” in an op-ed. He states that the supposed bubble for Bitcoin has burst due to two reasons: increasing pressure from regulators and the supposed flaws of the virtual currency.
He notes that a number of countries have actively moved to ban crypto transactions to varying degrees. He notes:
Regulators are gradually waking up to the fact that they cannot countenance large expensive-to-trace transaction technologies that facilitate tax evasion and criminal activity.
It should be noted that this is the typical FUD thrown at BTC. The reality is that the vast majority of transactions are perfectly legal, a fact that has been supported by Senate testimony.
He then goes on to say that governments will regulate and then appropriate any new technology. If this is true, then doesn’t that mean that Bitcoin and other cryptocurrencies can find a home in a country’s economic system once regulated and approved? While die-hard purists will chafe at any regulations in place, the majority of the public will be fine with them as it will boost confidence that the new technology is safe.
Trotting out the Tired Energy Use Excuse
Rogoff then turns his attention to the flaws of Bitcoin itself, namely its energy consumption and lack of efficiency. He says:
The very nature of decentralized ledger systems makes them vastly less efficient than systems with a trusted central party like a central bank. Take away near-anonymity and no one will want to use it; keep it and advanced-economy governments will not tolerate it.
This bit of FUD about energy consumption has been long-lasting and is constantly trotted out in the media. The reality is that Bitcoin mining is becoming more energy-efficient over time, and miners are relocating to areas that feature renewable energy sources and have lower temperatures to reap the benefits of cheaper power and the lack of need to cool the mining rigs. As technology progresses, energy demands continue to drop. It’s not like we fire up our cars in the morning by dumping a bunch of coal or wood into a boiler.
Rogoff throws a little bit more shade at Bitcoin as he winds up his op-ed. He concludes:
The price of these coins is not necessarily zero. Like lottery tickets, there is a high probability that they are worthless. There is also an extremely small outside chance that they will be worth a great deal someday, for reasons that currently are difficult to anticipate.
As stated above, Bitcoin has been declared dead and buried hundreds of times. While the market is currently in a bearish mood, there’s no denying that BTC was $1,000 at the start of 2017. Even if BTC continues to trade at its current $3,431, that’s not a bad return on investment.
What do you think of this nocoiner slinging FUD at BTC? Let us know in the comments below.
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