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Eswar Prasad, professor of international trade policy at Cornell University, believes that Bitcoin will soon cease to exist, giving way to more sustainable cryptocurrencies.
The author of the book “The Future of Money: How the Digital Revolution is Transforming Currencies and Finance” Eswar Prasad said this on the “Squawk Box Europe” program on CNBC. He explained that over the past few years, the bitcoin rate has been very volatile. So, in November it reached a record level of $ 69,000, but now BTC is trading at $ 46,000.
In addition, Prasad criticized bitcoin for the high energy costs of mining it. Given that there were only a few cryptocurrencies before, and today there are already several thousand, many of them, according to Prasad, are more useful and environmentally friendly than Bitcoin.
“Bitcoin is not using blockchain technology very effectively. It employs an environmentally destructive transaction validation mechanism. Moreover, Bitcoin does not scale well, ”Prasad said.
At the same time, the professor believes that blockchain can fundamentally change the field of payments by simplifying operations such as buying real estate or a car. However, according to Prasad, bitcoin does not perform well as a medium of exchange, so it is unlikely to have fundamental value other than investor confidence in it.
Prasad noted that crypto assets have “pushed” central banks to research and develop their own digital currencies. According to the professor, government stablecoins will be useful because they can reduce transaction costs and increase public access to banking services, thereby ensuring the stability of the financial system.
“As much as we scold bitcoin, it really made a revolution that can ultimately benefit the public directly or indirectly,” concluded Prasad.
Prasad said last year that the digital yuan would increase the yuan’s role in international payments, but would not replace the dollar as a reserve currency.
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