ING’s Top Economist Hesitant About Bitcoin But Gives A Thumbs-Up To Blockchain Technology
The stratospheric rise of Bitcoin has been receiving a mixed response in the form of industry bigshots speaking out either in favour of or against the same. The latest addition to this growing list is Teunis Brosens, the chief economist for Dutch banking giant ING. He strongly believes that Bitcoin shall end up as a niche financial product in days to come. A report dated 18th December published by the principal economist at ING revealed that the actual usage of virtual tokens shall be limited to, “tech nerds, people obsessed about their privacy, [and] people afraid of (hyper) inflation of traditional currencies,” among others. He also added that, “In the long term, bitcoin has little to offer to a wider audience, and will likely return to being a niche product for a select group of enthusiasts.”
The stand taken by Bronsens is in sharp conflict to the pronouncements made in regards to Bitcoin by other famous personalities most of whom have sided with the crypto coin in the aftermath of its price hitting above the $18000 boundary and derivative trading being launched by both CBOE and CME platforms in the U.S.
However, Bronsens argued that some of the inherent features of Bitcoin which have been previewed as its strength such as lack of central authority can actually distance it from the general crowd and propel it towards a much more mainstream audience. He also added that the extreme price volatility of Bitcoin makes it difficult for common customers to enter into transactions with its backing. Well it can be argued that Bitcoin futures might help fight the pangs of volatility, but when was the last time you entered an upscale restaurant and tried paying the bill using bitcoin futures! It’s the actual value of currency you are holding in your virtual wallet that matters and Bronsens is apprehensive of the same being subject to massive fluctuations. He penned down in his report that, “For bitcoin to function as a means of payment, it needs to be stable. A world in which your money buys you a large latte today, but only a small espresso tomorrow, is hardly convenient.”
Although his criticism mostly targeted Bitcoin, he also briefly spoke about other cryptocurrencies in general based on the fact that their open-source architecture simply does not fine tune with mass-market usage.
“While cryptocurrencies do compete with each other for users, and can create value for their users by providing an extensive network of other users, they are not able to create unique value for their users by being a distinctive platform with special features not found elsewhere,” Brosens stated in the report.
In spite of being dubious about the future prospects of Bitcoin, Bronsens holds high praise for the underlying blockchain architecture. This was revealed when he exclaimed that, “Blockchain is an impressive technology that may bring progress to a variety of fields, ranging from finance to health care, and from notary to voting. Long live the blockchain.”
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