Federal Reserve of Boston report drills down into economics of Bitcoin, says future uncertain
Coindesk has brought to light a 28-page policy brief published by the Federal Reserve Bank of Boston titled, “Bitcoin as
Coindesk has brought to light a 28-page policy brief published by the Federal Reserve Bank of Boston titled, “Bitcoin as Money?”
The report takes a deep dive into the economics of Bitcoin. Implications for altcoins, by extension, are drawn. While the future of Bitcoin is considered highly uncertain, it has paved the way for innovation in efficient payment systems more fitting for a technologically advanced world.
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Other key points:
– Some of the features built into Bitcoin’s design have hampered its ability to function as fiat money.
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– Theories of financial intermediation can be used to explain how bitcoin processing has evolved and how it will evolve in the future.
– Mining operations can be considered highly inefficient and may one day prove unaffordable.
– Pooled mining is more efficient and operations naturally gravitate toward fewer “coalitions”. This form of “centralization” may be problematic to the network’s integrity down the road.
The paper does make the disclaimer that the views expressed are those of the authors and do not necessarily concur with those of the Federal Reserve and related bodies.
In April, the St. Louis Fed also weighed in on Bitcoin, concluding that it and gold make lousy money.
I’ve noticed such studies coming from big financial institutes (banks, telecom companies and even state structures) more and more often. I think the Bank of Boston payed more attention to Bitcoin than any altcoins, and it is quite clear. It has been noted, and quite correctly, that ‘Some of the features built into Bitcoin’s design have hampered its ability to function as fiat money’. One can not disagree with that. These issues have been discussed at IRC d100-conference held by developers of Bytecoin in October 2012. Those involved in the society were aware of these problems 2 years ago, while… Read more »
All the big institutions are afraid. They think the bitcoin community want, that bitcoin have to replace money.
I only can say this about banks etc. You can’t trust them! Because of them were in a crisis. They make wrong investments and wall street collapsed. Who paid the bill? With bitcoin we won’t have this shit. And it’s risky and it’s volitality, because it have to go to nasdaq and it will be stabile and it will increase ofcourse. But there ia to.much around in bitcoin and peer to peer is wonderful. Blesses to satoshi nakamato!
I think, that we can to trust banks and i can understand their afraid about crypto tech. But they only try to protect fiats. Their fear is bluff. Banks is follow the development of bitcoin (as the most stable crypto coins), and one day they will include it in their system.