- Senior professor of international trade policy, Eswar Prasad says, ‘Bitcoin itself may not last that much longer.’
- Bitcoin might have to fight for the top spot as more environmentally friendly and sustainable cryptocurrencies continue to hit the market.
- Bitcoin continues to struggle in a tight range of around $46,000.
Since 2009, Bitcoin has topped the charts of the cryptocurrency market. It is the most valuable digital token, leads market trends, and is unpredictable. There is no certainty on what it has to offer in the coming year. An academic expert has raised alarming concerns about the future of Bitcoin.
People predict and estimate its price trajectory, but it always manages to shock the market from its follow up. Over the last few years, Bitcoin has been swinging in terms of valuation. Several investors have amassed huge profits from these fluctuating prices, but many have also lost a fortune. Let’s see how this expert debate will now shift the minds of some.
Bitcoin: Inefficient and Unsustainable?
A senior professor of international trade policy at Cornell University, Eswar Prasad, commented on Bitcoin’s future. In an interview conducted earlier this month, Prasad said that ‘Bitcoin itself may not last that much longer.’ Prasad raised questions about the inefficient use of blockchain technology by Bitcoin.
The author of ‘The Future of Money: How the Digital Revolution is Transforming Currencies and Finance’ further explained that ‘Bitcoin uses a validation mechanism for transactions that is environmentally destructive and does not scale up very well.’
Prasad made a comparative analysis, proposing that there are newer cryptocurrencies that use blockchain technology in a more efficient manner. Nonetheless, he is of the view that blockchain technology is here to transform the world of finance. He firmly believes that its use will change our day-to-day money transactions and buying mechanism.
Prasad further said that ‘Bitcoin is not serving well as a medium of exchange. I don’t think it’s going to have any fundamental value other than whatever investor’s faith leads it to have.’ He was of the idea that the increasing popularity of cryptocurrencies has triggered the insecurity of central banks. These banks now feel obligated to issue digital versions of their own currencies.
Moreover, the professor believes that digital currencies have a tendency to provide a low-cost and accessible payment option. As a result, their use could increase financial stability and financial inclusion in several ways. Lastly, Eswar Prasad said that ‘Bitcoin has really set off a revolution that ultimately might benefit all of us either directly or indirectly.’
The uncertainty hovering around Bitcoin
Experts claiming that the popularity of BTC might fade in the near future is surely not a good sign for the coin. However, there is no doubt that the carbon footprint of BTC is extremely high, as it consumes more energy than some countries. These concerns have been raised several times about the leading cryptocurrency. Moreover, it is also damaging the reputation of the currency in the crypto community.
Only 10% of the coin’s total supply is due to be mined. This will require more power and will add to the worldwide environmental misery. Also, tens of cryptocurrencies are more sustainable and usable than BTC. They compete with the market leader by being more environmentally friendly.
Bitcoin has also stayed incredibly volatile over the last month as it fell from over $58,000 to below $45,000. At the time of writing, it is valued at around $46,500. However, it is still 5% below the weekly price comparison. The market cap and trading volume of the coin have also received a cut because of its price degradation.