Thursday, March 4, 2021

Harvard Professor Warns Central Banks Will Never Allow Bitcoin to Go Mainstream

Kenneth Rogoff

Harvard Professor of Economics and former chief economist at the International Monetary Fund Kenneth Rogoff told CNBC that central banks won’t allow bitcoin and other cryptocurrencies to become mainstream. “Eventually over the long course of history, the government first regulates and then it appropriates, and I think we can see that happening here,” he warned.

 “Clearly, there are a lot of wealthy people and well-known financiers, often very senior, who publically said they are investing in it [bitcoin] and that has given confidence. But I have to say, regulation is in its early innings – if there is no final use case for bitcoins, [and] I don’t think it’s going to be, [then] ultimately this bubble will pop, but it could take a decade,” he said.

 “As it really starts to compete with ordinary, fiat currencies, government currencies, I think they’ll clamp down on it like a ton of bricks. They are not going to allow that to happen,” he added.

Rogoff knows of what he speaks. He is a major league, top-tier government technocrat, who has the ear of governments globally. I think he is a despicable statist, (He wants to ban cash) but he does understand the state's perspective. 

The price advance in bitcoin is extremely powerful at present but the government is not going to allow any cryptocurrency, outside of its own, to exist as a general medium of exchange.

“I don’t think regulating it is all that difficult,” Rogoff said and he is correct.

The hammer is there whenever they want to use it.

. -RW

6 comments:

  1. Bitcoin will never be competition as an alternative currency given that its maximum transactions per second on the BTC network is a measly 7. The most transactions ever processed in a day is around 400k. On top of that you have to take into account the CPU cycles to update the blockchain (mining costs) and now you're talking about some serious $ in overhead. I think the fastest blockchain networks are still way below (2-3k) the number of transaction per second that just VISA processes (65k). IMO, blockchain and crypto have their uses, but so far nothing has been created that is going to replace any major currency.

    ReplyDelete
    Replies
    1. You are absolutely right, it doesnt scale and will never scale. The threat banking has to be careful is what is developed to correct the "limitations' of crypto currency.

      If someone makes a paradigm shift in the way crypto works and really puts the banks out of the control game then they will have a real problem on their hands.

      Delete
    2. Bitcoin is not and cannot be Visa. Block chains are an extremely inefficient way to process transactions. That isn’t what bitcoin is optimized to do. Bitcoin is optimized for security. It is designed in such a way that it is completely censorship resistant. Those CPU cycles generate bitcoins society.

      Point being is that the selling point for bitcoin is that its payments are completely uncensorable as a result of the CPU cycles. Nothing and no one can stop you from sending a payment over the bitcoin network to whomever you want to.

      Second level solutions can be built on top of bitcoin so you can buy your coffee, but having an
      unchangeable; indisputable, uncensorable way to send value is extremely valuable, even if you never buy coffee with it.

      Security vs usability is a read off and I expect that down the line bitcoin will increase its blocksize (but not to the extent that any significant fraction of the worlds transactions will be on the blockchain.) but buying coffee doesn’t need to be on the blockchain. Im they are right to focus on security, and this doesn’t impede its store of value function, and for it to overcome the obstacles the state will put in its way to use it as a medium of exchange, it needs to establish itself strongly as a store of value that people want.

      If you don’t own bitcoin, you are massively underestimating the utility of being able to send value anywhere in the world without any interference from states. Ask Iran how valuable that is.

      Delete
  2. These are creatures from Jekyll Island games using simple reverse psychology. The central banks can’t wait for digital currency, social security tattoos, etc. A fool believes otherwise just because some dude says so.

    ReplyDelete
  3. Jimmy Joe MeekerMarch 4, 2021 at 8:27 PM

    bitcoin is designed to condition people into the sort of currency that technocracy has wanted since the 1930s or so. A currency that serves as an energy ration where every transaction is not only logged but must first be permitted to go through.

    It is about developing the next level of monetary control which of course central banks and governments will take up once the time is right and resistance is as low as it will go or there is some "emergency" that can be exploited.

    ReplyDelete
    Replies
    1. People are going to keep buying bitcoin because the value of bitcoin keeps going up. They might not understand why it’s going up, but they don’t need to to understand that holding government money balances is stupid when bitcoin balances increase in value over time.

      Central banks can make their central bank shitcoins, but it isn’t going to change bitcoin buying behavior.

      Delete