Robert Shiller has said today that cryptocurrencies will be failed experiments, and compared them with other forms of failed currencies that appeared in the last two centuries, in an article published today on Project Syndicate. He also made reference to the mysterious aura that surrounds them.
Robert Shiller in a Nobel prize winner economist, who is best known for predicting the real estate bubble and its consequences over the economy. He is a long time skeptic of alternative forms of money and cryptocurrencies, stating that bitcoin was the best example of a bubble last year.
Shiller talks about how bitcoin and cryptocurrencies are treated like new kinds of currencies and mentions that other kinds of currencies have been established before as a proof of the faith of change that certain revolutions wanted to have. Abou this he states that:
ESTABLISHING A NEW KIND OF MONEY MAY BE SEEN AS A COMMUNITY’S AVOWAL OF FAITH IN AN IDEA, AND AN EFFORT TO INSPIRE ITS REALIZATION
Then he compares bitcoin with failed currency essays: The Cincinnati Time Store, where merchandise was sold in exchange of “work hours”, and workers traded their “work notes” for whatever they wanted to buy. Sadly, the shop only lasted three years. And the later attempt of an “electric dollar”, a proposal of backing the dollar not with commodities but with electrical power generation, that also was met with skepticism.
He thinks that the tech that surrounds the world of cryptocurrencies give them an air of novelty that makes them different from these attempts, but in the end, they will meet the same fate. About this, he states that:
THAT MYSTERY CREATES AN AURA OF EXCLUSIVITY, GIVES THE NEW MONEY GLAMOUR, AND FILLS DEVOTEES WITH REVOLUTIONARY ZEAL. NONE OF THIS IS NEW, AND, AS WITH PAST MONETARY INNOVATIONS, A COMPELLING STORY MAY NOT BE ENOUGH.
To him, bitcoin will be another tech glamoured, failed attempt of currency, that shares the same traits of the examples given, and that is why he talks about it as “the new allure of old money”. Robert fills the ranks of famous personalities that don’t think that bitcoin will be a part of the financial future of the world, like Bill Gates and Warren Buffett.