Goldman Sachs has once again provided its perspective on Bitcoin and cryptocurrency, this time in a report titled “All About Bitcoin”. It is the second time in a few weeks that the investment bank has offered its insight on the topic, leaving Bitcoiners intrigued by the flattering attention they’re now getting from Wall Street’s big boys.
Goldman’s synopsis can be summarized by the following statement:
“So where does that leave us? With the conclusion that Bitcoin likely can’t work as a currency, but some sense that the ledger-based technology that underlies it could hold promise.”
The researchers behind the report did give Bitcoin a chance though, saying, “obstacles to Bitcoin being used more broadly in the payments system are arguably not insurmountable.”
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Roman Leal, an IT services analyst at Goldman, believes that Bitcoin’s biggest hurdle will be maintaining its innate cost advantage in the face of greater regulation, higher costs and competitors more experienced in the field. He also wrote that while it is too early to tell how traditional financial institutions will react to Bitcoin, “it is only a matter of time before major incumbents develop a digital currency strategy.”
While the report isn’t the most flattering, it still comes a long way from what has been perceived as Wall Street’s shunning of cryptocurrency. Then again, skeptics will tell you that such institutions wouldn’t be paying attention to it unless they see potential in developing the technology for their own purposes. While potentially beneficial for broader society, many of the most passionate Bitcoiners would abhor such a prospect.
For now, Bitcoiners have two reasons to be pleased with such a report. First, the fact that their creation is even garnering such prestigious attention. More significantly, not only did Goldman stop well short of completely bashing cryptocurrency, it spoke positively about its technological potential. Michael Terpin, founder of BitAngels, said, ““People will read it and draw their own conclusions. It’s nice they are paying attention to it, and don’t have a Bitcoin-is-evil view.”
Similarly, Goldman’s attention was noticed in its early assessment on Bitcoin several weeks ago. There however, the tables were turned somewhat: they were optimistic about some of Bitcoin’s immediate investment opportunities but offered a rather tepid view on cryptocurrency’s overall potential. Here, it’s highly positive about the future and its technological potential to transform the world of finance.
As alluded to earlier, the report should be a bright warning signal of traditional finance setting its sights on developing similar technologies. Fortunately or unfortunately for Bitcoin, there is not much they can do in the libertarian world of decentralized currency to stop them.