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Bitcoin might fade out of existence, warns academic

Prasad stated that Bitcoin's lack of efficiency and its inability to facilitate exchange as a mode of payment will be the reason for its downfall.

By: Tech Desk | Pune |
Updated: December 24, 2021 3:58:06 pm
Venture capitalists are betting billions of dollars in cryptocurrency. (File Photo)

The future of Bitcoin is hard to predict, but Eswar Prasad, an international trade policy professor at Cornell University has warned that the world’s most popular cryptocurrency could fade out in the near future.

In a recent interview with CNBC, Prasad stated that Bitcoin’s lack of efficiency and its inability to facilitate exchange as a mode of payment will be the reason for its downfall.

Blockchain is the underlying technology behind cryptocurrencies. Bitcoin and the thousands of cryptocurrencies are essentially codes recorded on a blockchain that gets longer and longer as more people use them. Prasad believes that Bitcoin’s use of blockchain technology is not very efficient.

“It uses a validation mechanism for transactions that is environmentally destructive that doesn’t scale up very well.”

The Indian-American economist also opposed the consensus mechanism for Bitcoin’s “environmental destruction” adding that these are the new green alternatives. “I think the promise of decentralised funding with blockchain is real, but Bitcoin itself may not last long,” he told CNBC.

However, Prasad has endorsed central bank digital currencies (CBDCs) stating that it “could be good in many ways in terms of providing an additional payment option, a low-cost payment option that everybody has access to, increasing financial inclusion, and potentially also increasing financial stability.”

He added that digital currencies are beneficial as they may provide a low-cost payment option that everyone has access to, thereby increasing financial inclusion. “Much as you might not like Bitcoin, it has really set off a revolution that ultimately might benefit all of us either directly or indirectly.”

Meanwhile, in a recent Twitter exchange, with Grammy award-winning rapper Cardi B, former Twitter CEO Jack Dorsey said on Tuesday that Bitcoin will replace the US dollar. Cardi B asked on Twitter if crypto would replace the US currency to which Dorsey replied, “Yes, Bitcoin will.”

Endorsing blockchain technology for transparency in payment, Dorsey has recently released the whitepaper of its decentralised Bitcoin exchange proposal— tbDEX. Dorsey has confirmed to investors that Bitcoin will be a “big part” of the company’s future.

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