Joseph Stiglitz, Nobel Laureate in Economics in 2001 and former Chief Economist of the World Bank has repeatedly explained why he believes that bitcoin should be banned.
"The real reason why people want an alternative currency is to participate in vile activities"
"What we really should do," he said, "is to demand the same transparency in financial transactions with bitcoins that we have with banks." If this were to be done, he believes, the bitcoin market "would simply collapse."
Do you agree or disagree and why? Thank you
Here I am sharing some important links which explains the reason asked here.
http://paymentsjournal.com/cryptocurrency-the-future-online-transactions/
http://time.com/money/5178814/the-future-of-cryptocurrency/
Because our economy run on debt.
The governments keep spending more than they make so they have to keep printing money and pass the check to future generations.
Sooner or later, the economy is going to collapse, it's just not sustainable.
With cryptocurrencies, we can control the money supply so that it doesn't lose its value over time (or at least it does at a controlled rate).
It would force the governments to spend responsibly.
It is inevitable that digital currency will be the mainstay in probably 50 years, with everything moving towards digital and cyber realms. We are already in the midst of digitalization for majority of things anyway. The only question is in what form the digital currency will exist in the future, will it be in these bitcoins type form or some other form??
Currently the government, banks etc are skeptical about cryptocurrency, which is obvious because these people, who currently control the world economy, are intimidated by the possibility of a parallel economy, completely out of their control and grasp.
A regulated digital currency is the future in my opinion.
Cryptocurrencies provide a whole new kind of value interchange. First of all, their supply and life-cycle can be digitally adjusted to fit the community's needs. That allows a cryptocurrency to match quite well the utility/storage value that was designed for.
In addition, they can be seen as a simple numeric amount (like fiat currencies) but also have have other digital properties that might transform them in rich digital assets. One token (or cryptocurrency unit) can behave in different ways as a payment method, right to vote or asset depending on who owns it or when/how it's being used.
Finally, autonomy is another big deal. Whenever you own a digital identity in a blockchain, your cryptocurrencies are usually yours and no one can change this, but you.
How will cryptocurrency help you?
Fraud: Individuals cryptocurrencies are digital and cannot be counterfeited or reversed arbitrarily by the sender, as with credit card charge-backs.
Immediate Settlement:Purchasing real property typically involves some third parties (Lawyers, Notary), delays, and payment of fees. In many ways, the bitcoin/cryptocurrency blockchain is like a “large property rights database,” says Gallippi. Bitcoin contracts can be designed and enforced to eliminate or add third party approvals, reference external facts, or be completed at a future date or time for a fraction of the expense and time required to complete traditional asset transfers.
Lower Fees: There aren’t usually transaction fees for cryptocurrency exchanges because the miners are compensated by the network (Side note: This is the case for now). Even though there’s no bitcoin/cryptocurrency transaction fee, many expect that most users will engage a third-party service, such as Coinbase, creating and maintaining their bitcoin wallets. These services act like Paypal does for cash or credit card users, providing the online exchange system for bitcoin, and as such, they’re likely to charge fees. It’s interesting to note that Paypal does not accept or transfer bitcoins.
Identity Theft: When you give your credit card to a merchant, you give him or her access to your full credit line, even if the transaction is for a small amount. Credit cards operate on a “pull” basis, where the store initiates the payment and pulls the designated amount from your account. Cryptocurrency uses a “push” mechanism that allows the cryptocurrency holder to send exactly what he or she wants to the merchant or recipient with no further information.
Access to Everyone: There are approximately 2.2 billion individuals with access to the Internet or mobile phones who don’t currently have access to traditional exchange, these people are primed for the Cryptocurrency market. Kenya’s M-PESA system, a mobile phone-based money transfer, and microfinancing service recently announced a bitcoin device, with one in three Kenyans now owning a bitcoin wallet. (Let me repeat that again. 1/3)
Decentralization: A global network of computers use blockchain technology to jointly manage the database that records Bitcoin transactions. That is, Bitcoin is managed by its network, and not any one central authority. Decentralization means the network operates on a user-to-user (or peer-to-peer) basis. The forms of mass collaboration this makes possible are just beginning to be investigated.
Recognition at universal level: Since cryptocurrency is not bound by the exchange rates, interest rates, transactions charges or other charges of any country; therefore it can be used at an international level without experiencing any problems. This, in turn, saves lots of time as well as money on the part of any business which is otherwise spent in transferring money from one country to the other. Cryptocurrency operates at the universal level and hence makes transactions quite easy.
There is no other electronic cash system in which your account isn’t owned by someone else.
Take PayPal, for example: if the company decides for some reason that your account has been misused, it has the power to freeze all of the assets held in the account, without consulting you.
It is then up to you to jump through whatever hoops are necessary to get it cleared, so that you can access your funds. With cryptocurrency, you own the private key and the corresponding public key that makes up your cryptocurrency address. No one can take that away from you (unless you lose it yourself, or host it with a web-based wallet service that loses it for you).
Overall, cryptocurrencies have a long way to go before they can replace credit cards and traditional currencies as a tool for global commerce.
Fact is, many people are still unaware of cryptocurrency aka Digital Currency. People need to be educated about it to be able to apply it to their lives. Businesses need to start accepting it They need to make it easier to sign up and get started.
The future appeal of cryptocurrencies lies in allowing you ultimate control over your money, with fast secure global transactions, and lower transaction fees when compared to all existing currencies.
When used properly and fully understood it would be the initiator of many emerging systems that will fundamentally change our global economic system.
Stiglitz is a smart guy, but if he really made that statement he is wrong. It is quite obvious that cryptocurrencies are not only used for "vile activities". Instead, it is a question of power. If the power to print money is in the hand of the state (or, more correctly, the hands of banks, as Frédéric Quimet has pointed out correctly) then some form of centralized control exists. Decentralization frightens a lot of people.
I was just recently asked this exact question by a journalist. Here is my reply. I never even mentioned "vile activities". The summary:
Alternative currencies have always been desired. The financial crash of 2008 gave rise to blockchain, allowing anyone to create a currency. Strong financial gains have spurred marketing and interest in the trend. Cryptocurrencies are going to allow currencies to expand beyond simply a transfer of wealth and a store of value, and actually add a 3rd dimension to money, an expression of who you are.
Unabridged version here:
https://bit.ly/2KbWgKC
I had though that the only legitimate reason for bitcoin that I found was to pay dissidents. However, I then talked to a friend who knows about that world and he said that dissidents far prefer cash, which friends secretly slip to them.
Details are in my book, Bitcoin: The Mother of all Scams https://www.amazon.com/gp/product/B095NMLM2F
Cryptocurrencies can offer things that have never been possible before. Let's take a look at some of the main reasons why people are so eager to abandon traditional forms of currency in favor of cryptocurrencies.
1. Distrust of the current financial system
Bitcoin was revealed to the world after the global financial crisis of 2007-2008. This is a completely new way of thinking about money, finance and banking. During this time, people around the world have been hit hard by the reckless behavior of large financial institutions and the inability of governments to regulate them. There was a huge sense of distrust throughout the system and a strong desire for something new.
In addition, it goes without saying that cash can be easily stolen from your pocket with a near-zero chance of finding criminals. Even more: Recent research has shown that money laundering is 800 times less common than cash currency. Simply put, traditional money is a widely used tool for financial criminals.
This seems to be a good environment to introduce a new type of currency. People quickly saw the value of this bitcoin and jumped on it to make it one of the fastest growing new technologies in history.
The big difference with Bitcoin is that it is decentralized. This means that no company, government or organization has complete control over the currency. This is in stark contrast to traditional currencies such as the US dollar. The US government can create any US dollar and devalue it. This happened on a large scale after the global financial crisis. They can also take back US dollars at any time.
Bitcoin and cryptocurrencies offer a new form of currency that is not controlled by any authority. It cannot be seized and it cannot be inflated by an irresponsible government. This is the biggest reason for the rise of cryptocurrency so far.
2. Get rich quick
Unfortunately, the technical steps and ideology of cryptocurrency are often overshadowed by skyrocketing prices. Many people do not really care about its decentralization, they just want to buy the cryptocurrency to make a quick profit.
Many who bought Bitcoin in the early days became millionaires overnight. There are countless stories of ordinary people and early investors who have made their fortune in bitcoin with relatively little initial investment. These stories capture people's imaginations and make them rich.
It is this mindset that has sent cryptocurrency prices down to their cars. The 2017 bubble was led by people who want to raise prices. The next fall was due to the same people fleeing the market as soon as things turned south.
There have also been many cryptocurrency companies and projects that have seen an opportunity to take advantage of the limited space regulations. They wanted to increase the value of a particular token as quickly as possible, without giving much value to the world.
This method of getting rich quick has caused many to lose interest in the entire cryptocurrency project. The promise of quick profits is still a major driver of cryptocurrencies and bitcoin.
3. New financial plans
Another reason people are attracted to cryptocurrencies is the completely new uses of financial alternatives. These programs are called "decentralized finance" or DeFi programs for short.
Some of the top DeFi programs offer innovative approaches to peer lending. Financial compound is one of these approaches. In their decentralized system, users can lend at any amount, without putting these funds under control. Everything is done automatically with smart contracts in blockchain.
dYdX Exchange is another interesting DeFi application based on cryptocurrency. This is a decentralized method of lending and money lending for cryptocurrency trading. dYdX is also a "no-confidence" program, so you never have to give up controlling your budget to access the benefits of borrowing. You do not need to register or confirm to start selling immediately.
Another example of a new application made possible by cryptocurrency is CryptoKitties. This is a game where you can use your Ethereum tokens to buy, sell and produce digital kittens on the Ethereum network. Each kitten is unique in terms of cryptography and is potentially worth thousands of dollars.
These new programs are not possible with traditional currency and will still be a big card for the world of cryptocurrencies.
4. Low cost border payments
Perhaps one of the biggest incentives for financial companies to start testing cryptocurrencies is the possibility of low-cost international payments. International payments are still very expensive and difficult for banks. Utilizing new technology
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