Biden administration report says crypto assets appear to be here to stay
White House report pointed several negative points about Bitcoin & other crypto assets and indirectly suggested citizens remain away from investing in these assets but at the same time admitted that cryptocurrencies will stay here.
Recently a report was published by the US Biden Administration and that report dragged cryptocurrencies & their back-end technology on their radar for criticism.
The first negative thing they pointed out about Bitcoin is no responsible company behind Bitcoin Blockchain, which can decision like Ethereum takes e.g example they (Ethereum foundation) shifted Ethereum blockchain operations from Proof-of-work (PoW) to Proof-of-stake (PoS) to reduce the network energy consumption.
The second negative point, the report pointed out, is the high electricity consumption by the Bitcoin network which is 0.42% of the total electricity consumption in the world but the report failed to notice that 59.5% of BTC mining operations are running on renewal & green energy sources.
The third thing the report noted is high volatility in the price of Bitcoin, where they noticed that the price of Bitcoin surged by 1000% between 2019 to 2021 but the price of this asset plunged by 70% between Nov 2021 to Oct 2022. In short, the report said that people should not consider Bitcoin as a store of value.
The fourth thing, the Biden administration pointed out, is the risks associated with the financial system in cryptocurrencies. The report claimed that digital assets may trigger a “Minsky moment”. Crypto propenents noted that this point should not be pointed out by the report, as some of the popular US banks failed to survive.
Perhaps they pointed out multiple negative points about cryptocurrencies but they admitted that crypto will stay here and policymakers should ensure the safety of the citizens over their engagement in this sector.
“Because crypto assets appear to be here to stay, policymakers should consider these risks to avoid a ‘Minsky moment’ caused by crypto assets,” White House report read.
The fifth point, this report noted is the ability of cryptocurrencies over sovereign fiat currency. The report noted that cryptocurrencies have no intrinsic value, which is also the same case in sovereign fiat money, but still cryptocurrencies can’t replace the requirements of sovereign fiat currency more easily.
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