The Bank of International Settlements, released some criticism regarding cryptocurrencies over the weekend. Saying it will never be in the spotlight for financial services.
The report was released Sunday, June 17, 2018. It stated that bitcoin has “ranges of shortcomings,” electricity issues were also mentioned due to high power demand. Other “shortcomings” mentioned included a claims that bitcoin can be easily manipulated, can suffer from fraud, and is an unstable technology. These factors are preventing bitcoin from being mainstream.
They also gave a warning regarding the decentralized ledgers that can increase in size that could hurt even smartphone servers, the report said, according to Bloomberg.
“The associated communication volumes could bring the Internet to a halt, put in the simplest terms, the quest for decentralized trust has quickly become an environmental disaster.”
But even though cryptocurrencies were trashed in the reports, BIS mentioned, on a good note, that blockchain technology can also provide benefits on financial systems globally. There are a few things that need to improve to facilitate the transactions better, such as trade finance. But still there are arguments regarding bitcoin being too risky to explode on a wide scale.
“Trust can evaporate at any time because of the fragility of the decentralized consensus through which transactions are recorded,” the report stated, according to Bloomberg. “Not only does this call into question the finality of individual payments, it also means that a cryptocurrency can simply stop functioning, resulting in a complete loss of value.”
While these reports are coming out negatively regarding cryptocurrencies and is now drawing a lot of attention, at the same time that some on Wall Street are enjoying it. These reports can scare investors thus affecting the bitcoin price and making it lower.