Eswar Prasad, an economist at Cornell University that says that Bitcoin isn’t as anonymous as people think it is. Other issues pointed out by him include Bitcoin mining being extremely bad for the environment, and that it doesn’t work well as a currency.
Cornell Economist Points Out more Flaws of Bitcoin Besides Not Being Anonymous
Leading cryptocurrency Bitcoin isn’t as anonymous as people think it is, according to a professor at Cornell University, Eswar Prasad, and formerly head of the International Monetary Fund’s China division.
In an interview with CNBC on June 17, Prasad has highlighted the flaws of the flagship cryptocurrency.
Firstly, he highlights that Bitcoin mining is an energy-intensive process and that it harms the environment and that it’s “certainly not good for the environment”. On the counterpart, he does highlight that Ethereum requires less energy than the flagship digital asset, saying:
“That is going to be much less energy-intensive, and it could deliver a lot of the benefits that bitcoin was supposed to deliver. It could also make transactions much cheaper and quicker.”
Secondly, he points out that BTC isn’t as anonymous as people think it is:
“The main idea of bitcoin was to provide pseudonymity. But it turns out that if you use bitcoin a lot, and especially if you use Bitcoin to get any real goods and services, then it becomes possible eventually to link your address or your physical identity to your digital identity.”
He reminds the U.S. government’s recent success in tracking and retrieving part of the Bitcoin ransom from the Colonial Pipeline ransomware attack has increased doubts about the security and non traceability of Bitcoin transactions.
Bitcoin is a “Slow and Cumbersome” Medium of Exchange
Lastly, he says that BTC doesn’t work well as a currency as it’s “slow and cumbersome” to use it to pay for goods and services and that the market is very volatile, adding:
“So you could take a bitcoin to a store and one day, get a cup of coffee and another day, with the same bitcoin, be able to treat yourself to a lavish meal. So that doesn’t work well for the medium of exchange”
According to him, BTC has become a speculative asset for people who hope it will appreciate in value, rather than because they want to use it as a payment mode.