Bank For International Settlements Declares Cryptocurrencies Are Inefficient

A study published by the Bank For International Settlements, an organization owned by a conglomerate of banks with base in Switzerland, has ruled that most cryptocurrencies are too inefficient and that they won’t be able to substitute money anytime soon. This, according to a series of factors examined by researchers.
The Bank For International Settlements is a banking organization founded in 1930, after the first world war. Formed by more of 60 central banks from the most powerful nations all over the world, it has had an important role as an agent and trustee in financial operation between banks. Today, it acts more like a research institution for creating economic statistic-based policies all around the world.
The study, published recently, titled “Cryptocurrencies: Looking beyond the hype”, looks to address the issue of the recent rise of cryptocurrencies and it puts it in perspective of an organization like the Bank For International Settlements, comparing these alternative payment methods to the regular ones and evaluating its performance in different aspects. The study presents 4 main areas in which, according to their opinion, cryptocurrency payment systems are lagging:
Stability: The issue of cryptocurrency volatility is not new for everyone. The study claims that volatility is a major concern for cryptocurrency adopters, and while it is not exclusive of them, it is certainly most serious when dealing with cryptocurrencies. The market value of cryptocurrencies has dropped more than 50% since December, and it continues to do so, a fact that gives credibility to this issue.
Operating fees: In December, when prices skyrocketed, fees for a simple transaction also rose to more than 50 dollars, what made economically unpractical for people to buy a coffee with bitcoin, because fees were even higher than the purchase itself.
Sustainability and efficiency: The study states that cryptocurrency decentralized networks are highly inefficient and use up too many resources to be sustainable in the long run. The report makes a comparison between the efficiency of normal networks and the power consumption of cryptocurrency networks, finding the former to be way efficient than the latter. Also, the report states that the enormous stream of data taken to validate transactions could bring the internet down.
Security: Cryptocurrencies are prone to be hacked and its networks are vulnerable to be taken down by attacks. Now, this is not only inherent to cryptocurrencies, but these networks are more vulnerable to attacks than traditional banking networks, according to the report.
Some experts might say that the study attacks cryptocurrencies just because of the bypass that these alternate forms of payment does of banks, that might face obsolescence if its use is massified. But the study presents some concerns about real issues that should be addressed by cryptocurrency devs to improve their usability. The whole report can be read here.

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