Bitcoin [BTC] and the cryptocurrency market has caught the eye of many prominent members of the economic community with most of them voicing their opinions on it. In a recent interview, Paul Romer, a Nobel Laureate, spoke about the versatility of Bitcoin and the field of cryptocurrencies as a whole.
Speaking to Bloomberg, the NYU professor spoke about how organizations need to beef up cryptography, the technology behind the concept of blockchains and in turn cryptocurrencies. Romer stated that Bitcoin’s initial catalyst came from the fact that no trusted party was required to verify transactions.
He added that the lack of confidence that established central banks prided during the initial surge of cryptocurrencies but said that right now, those very banks have become very adept at keeping inflation in check. In his words:
“There is no need for people to fear or doubt the abilities of central banks. The past few years have taught us that government can do right by people by taking care of the information spiral an ensuring that the economy is stable.”
Romer was of the opinion that the technologies present right now are not at their fullest implementation and that there is a long way to go before they become mainstream. He even quoted the example of how blockchain technology can be used to monitor food security ie. tracking the resource from start to finish. The discussion also focused on cryptocurrencies can disturb the hegemony held by the United States dollar. To this, Romer said:
“The dollar cannot be perturbed because people still need it to conduct large transactions. The main problem with Bitcoin is that it is not very efficient to do large transactions. The world is still not ready for a single undiversified currency.”
The Nobel Laureate also opined that the US dollar will be threatened to a proper scale only in a 100 years and even then it may be because of the Euro or China. A lot of Nobel laureates have given their word on the world’s largest cryptocurrency with the last person being Paul Krugman. He had said that Bitcoin is a “self-defeating form of progress. According to him:
“but the validation, someone has to be investing the resources in effect to say that this token I’ve received is a real one […] I mostly know that the dollar bill in my wallet is the real one because it’s a bit hard to reproduce.”
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