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Despite the rapid introduction of cryptocurrencies and the growing confidence of the world population in bitcoin, some economists are still critical of the flagship cryptocurrency.
Among them is Professor Hans-Joachim Voth of the University of Zurich. In a recent interview, he discussed modern monetary theory, according to which money is considered a state monopoly. That is, public resources are concentrated in the hands of the government. This theory suggests that the state can solve many problems by issuing more money without fear of repercussions and being an issuer of the currency. Voth believes that this theory is attractive, but not plausible.
The economist mentioned an alternative option – the Bretton Woods system or the “Gold Standard”, according to which each issued monetary unit can be exchanged for a certain amount of gold. However, Voth believes that this model will not solve the current monetary problems. The essence of the gold standard is to limit the authority of governments and central banks to issue currency, which is rather silly, argues Hans-Joachim Voth. At the same time, the professor is pessimistic about cryptocurrencies. He is confident that bitcoin will not be able to fill the gaps in the Bretton Woods system and therefore is not able to become a full-fledged replacement for ordinary money.
“Blockchain technology, on the basis of which cryptocurrencies work, has various attractive properties. But I don’t see a single problem that can be solved with cryptocurrencies. At least, this is definitely not bitcoin, which has become a real disaster both for the environment and in terms of transactions, “the economics professor said.
Hans-Joachim Voth is not the only major scientist who doubts the possibilities of cryptocurrencies. Last year, Cornell University professor Eswar Prasad suggested that bitcoin did not last long, as it could be supplanted by more environmentally friendly cryptocurrencies. And Appukuttan Nair Damodaran, a professor of economics and social sciences at the Indian Institute of Management in Bangalore, said that bitcoin has already failed as a means of payment.
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