Cornell University Economics Professor stated that the promise of decentralized finance (defi) using blockchain technology is real, but Bitcoin may not last that long. Nonetheless, he acknowledged that Bitcoin “really triggered a revolution that may ultimately benefit all of us directly or indirectly.”

Economics professor doubts the future of Bitcoin and praises Defi

Cornell University Economics Professor Eswar Prasad (Eswar Prasad) talked about Bitcoin, cryptocurrency, blockchain technology, decentralized finance (defi) and central bank digital currency in a recent interview with CNBC.

Prasad is the author of the book “The Future of Money: How the Digital Revolution Changes Money and Finance”, and is Nandlal P. Tolani, Senior Professor of Trade Policy and Professor of Economics at the Charles Dyson School of Applied Economics and Management, Cornell University. Previously, he served as Director of the Financial Research Division of the Research Department of the International Monetary Fund (IMF) and Director of the China Division of the International Monetary Fund.

He pointed out that blockchain technology will produce “fundamental changes” in finance and the way we conduct daily transactions. He believes:

The promise of using blockchain technology to achieve decentralized finance is true, but Bitcoin itself may not last that long.

The economics professor explained: “Bitcoin is not very efficient in using blockchain technology. It uses a verification mechanism for environmentally destructive transactions, but it does not scale well.”

He asserted that there are new types of cryptocurrencies that use blockchain technology more efficiently than Bitcoin.

“For any asset, the question is where the basic value proposition is,” he continued, adding:

Given that Bitcoin is not a good medium of exchange, I don’t think it will have any basic value except for the belief of investors.

He continued to discuss currency competition and stablecoins. “It triggered an interesting element of currency competition. In principle, there are now stablecoins that can create more effective basic trading methods,” he described.

The professor added that cryptocurrency “ignited a fire under the leadership of the central bank and began to consider issuing a digital version of its own currency.”

Professor Prasad explained that the Central Bank Digital Currency (CBDC) “is good in many ways in terms of providing additional payment options, low-cost payment options that everyone can use, increasing financial inclusion, and possibly improving financial stability. of.”

He concluded:

Although you may not like Bitcoin, it does spark a revolution that may ultimately benefit us all directly or indirectly.

Do you agree with Professor Eswar Prasad? Please let us know in the comments section below.

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