Bitcoin will not last in the financial world, warning Nobel economists

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Robert Shiller, a Nobel laureate in economics, once said that Bitcoin will not be a “permanent feature” in the financial arena because politicians say the cryptocurrency is coming.

Schiller praised bitcoin for being “a very smart idea” at the Davos World Economic Forum on Thursday. But despite the technology behind him that impressed him, he feared it had “been a currency virus.”

“I tend to think bitcoin is an experiment. It’s a fun experiment, but it’s not a permanent feature in our lives,” Mr Shiller has warned that the price of bitcoin may collapse. “We over-emphasize bitcoin, and we should expand to the blockchain, which will have other applications.”

Theresa May said in Davos that she fears criminals are using digital money that can be used to anonymously transfer money. In an interview with Bloomberg, May said: “We should take these issues seriously in the area of ??cryptocurrency such as bitcoin.

US Treasury Secretary Steven Mnuchin also expressed concern about the abuse of digital currency. Mnuchin told CNBC: “My biggest concern is cryptocurrency, whether it’s digital money, bitcoin, or something else, and we want to make sure they’re not being used for illegal activities.” So in the US, our rules (say) You are a bitcoin wallet, you follow the same rules as a bank. ”

South Korea recently announced its ban on digital currency. Starting next month, people will be banned from using anonymous bank accounts for encrypted currency transactions.

Digital currency has been a key topic of conversation in Davos. Ethereum, which uses bitcoin as its rival, has set up its own lounge on the main promenade of the ski resort. Banks have shown a special interest in the blockchain – digital ledgers are the basis for cryptocurrencies.

A senior Swedish central banker said bitcoin is too volatile and can not be classified as money. Cecilia Skingsley, deputy governor of the Bank of Sweden, said: “In my opinion, cryptocurrencies, bitcoin and other currencies are what I see so far, and they do not meet what is called the currency standard.

“They are not a very stable value reserve – they are volatile – it’s not a very effective exchange medium because you do not buy your groceries with bitcoin, you do not get bitcoin for your salary, and you can certainly use bitcoin Taxes. ”

Skinner said she understands that digital currencies are attractive in countries where people do not trust public authorities, but she said bitcoin is a “bad option” because it’s too turbulent.

“If you talk about money in an efficient economy, over time, if you have a trusted authority that can release enough money – not too little or too little too much”.

However, some investors in Davos have questioned that Bitcoin faces a precarious future. Jennifer Zhu Scott of Radian Partners said bitcoin is a “terrible currency,” a “terrible payment system,” but insisted it was an asset. “I do not think Bitcoin will break money or money, Bitcoin is damaging gold,” she said.

In his view, bitcoin is very effective as a value repository because it has only 21 million liquidity, so far only about 16 million.

Neil Rimer, a general partner at Index Ventures, admitted that bitcoin could collapse theoretically to zero, but he also praised the progress that has been made since it was founded nine years ago. “This is one of the boldest, the most generous, the most profound inventions I have witnessed in my career, and it does have the power to help many people,” he said.

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