Another major figure in economics has weighed in on Bitcoin, this time Larry Summers- former adviser to Barack Obama, Harvard President and World Bank chief economist.
Speaking with the Wall Street Journal, he focused on the historical lessons learned with other technologies and that while Bitcoin is still far from ideal as a mainstream currency, it would be a “serious mistake” for it to be written off as “ill-conceived or illegitimate”.
Other notable figures (although not necessarily as knowledgable on the subject) have taken more extreme views on cryptocurrency. Senator Joe Manchin III of West Virginia called upon the government to “prohibit this dangerous currency”, while Texas’ Steve Stockman prepared a draft bill for the House of Representatives calling for virtual currency to be recognized as currency, not property, following the recent IRS tax ruling.
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Summers argued that the current financial system is inefficient. Despite the fact that it relies so heavily upon information technology, “it has not been disrupted as the distribution of books or clothing has been” by such technology. He’s not sure if Bitcoin will or won’t succeed in the future, but he is “much more confident that the world of payments will look very different 20 years from now”. It is therefore now “ripe for disruption”.
In his signature argument, he continues:
“The people who rejected the Internet as a curiosity for scientists were on the wrong side of history, the people who rejected digital photography as really an artificial thing were on the wrong side of history, and the people who felt that non-gimmicky tennis racquets were made with wood were on the wrong side of history. So it seems to me that the people who confidently reject all the innovation here [in new payment and monetary systems] are on the wrong side of history.”
He also cites the increasingly common argument of Bitcoin’s vastly more efficient and less expensive capabilities for transferring money internationally, which even officials from the Bank of Canada acknowledged while dismissing Bitcoin.