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The winner of the 2013 Nobel Prize in Economics believes that the viability of bitcoin as a means of payment is greatly reduced due to its high volatility.
American economist Eugene Fama (Eugene Fama) in an interview said that the first cryptocurrency will have value if it is used as money.
“When users use bitcoin as a means of payment, they actually conduct transactions with it – then BTC can have value, since it turns into a kind of money and a unit of account. This method adds value to Bitcoin. Usually, bitcoin is used in transactions and its supply is limited – in this case, it has no value, “the expert argues.
The economist wonders whether users will make transactions when bitcoin has so much volatility.
“Monetary theory says that a unit of account will not survive if it does not have a fairly stable real value, and its real price should not rise and fall sharply,” the Nobel Prize winner said.
Fama disagrees with the claim that BTC is a store of value. According to him, the idea that bitcoin has value should be considered a temporary phenomenon:
“In the long run, bitcoin can’t be a store of value, there’s nothing that adds value other than the investors who hold it. There has to be something really useful in the product for people to want to keep it for a very long time. The only reason is that people think: Is it a store of value? So, at some point, bitcoin will collapse.”
Eugene Fama argues: the market has not yet realized that bitcoin has no value, and when it understands, the reference crypto asset will leave the market.
Former U.S. intelligence analyst Edward Snowden said in June that, unlike fans of the crypto industry, he did not call for investing in digital currencies, but advised using them for payments. However, analyst firm Arcane Research warned last month that by 2040, when Bitcoin becomes a means of payment, its energy consumption will rise to catastrophic proportions.
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