Well, this is somewhat embarrassing.
Nobel Prize-winning economist Robert Shiller doesn’t think the peer-to-peer decentralized cryptocurrency bitcoin will not last forever. In fact, he believes that bitcoin will go extinct by…2118.
Speaking in an interview with CNBC, Shiller, who has been skeptical of the digital currency for a couple of years ago, warns that bitcoin will not last forever.
“Bitcoin won’t look anything like it is today. It will have a different name, if it exists. There will have been many hard forks changing it and changing it. And, it’ll be a matter of dispute whether it exists or not,” he said.
“The one scenario is that something like what happened after 2013 when bitcoin topped $1,000, and then lost 80 percent of its value. It looked like bitcoin was just fading away. It’s so hard to predict these things.”
Shiller thinks that bitcoin “looks like a bubble.”
It’s true that bitcoin doesn’t seem like a stable form of money and that it is already being co-opted by the state, but it’s pretty absurd to predict that bitcoin won’t be around in 100 years. Of course it won’t, neither will the U.S. dollar or the euro or a quarter of the companies in the Fortune 500.
Lance Brofman says
Since its notion of use as a medium of exchange has been debunked by us and others, supporters now primarily emphasize its function as a store of value. Goldman Sachs (NYSE:GS) pointed to the desire to use cryptocurrency for this purpose in its announcement of plans to begin a Bitcoin trading operation. A Goldman spokesperson noted that the firm concluded that Bitcoin is not a fraud. But while it does not have the characteristics of a currency, hedge funds, endowments, and foundations express interest in holding it as a valuable commodity given the limited quantity of Bitcoin that can ever be “mined” in a complex virtual system. Goldman said “it resonates with us when a client says, “I want to hold Bitcoin or Bitcoin futures because I think it is an alternate to gold as a store of value”.
In our report from January, 2018 we pointed out that digital cryptocurrency would eventually replace money as we know it today. But before this would occur we also suggested that government would take control of the cryptocurrency universe. Government would then know the exact real identity of all blockchain wallet owners, giving government knowledge of all transactions. Government and banks, central and otherwise, would then be the sole creators of the cryptocurrency and would control the amount outstanding.
The first step in how governments might get involved could involve cashing in on their names and status. Already there is a patent pending “Systems and methods for managing and processing transactions where legal tender status may be established for cryptocurrencies”. This would allow cash hungry governments at the national, state, and even local level to obtain income from cryptocurrencies without financial risk. Russia and Turkey have floated the prospect of a national cryptocurrency and Venezuela has actually launched one called the Petro. The price of one Petro is pegged to the price of one barrel of Venezuelan oil. The main purposes of the Petro were to evade sanctions and raise desperately needed cash. The Venezuelan government has already defaulted on debt so trusting Venezuela to honor its promise with regard to the Petro would seem no less risky than trusting it to pay interest on its bonds.
The challenge all cryptocurrencies face is attracting miners who use the crypto of choice for transactions, as a store of value, or as a speculative instrument. There is a need for each crypto to devise some feature that allows for a market share gain over others. It is presently unlikely that a crypto directly issued by a government or a central bank would receive immediate wide acceptance since the major original attraction of cryptos was that they were independent from governments or central banks. However, a crypto that had some element of legal tender status would clearly have a competitive advantage over its competitors.
We think the eventual replacement of paper money with a digital crypto could involve municipalities issuing what might be described as a put warrant. This is a security that gives the holder the right (but not the obligation) to sell a given quantity of an underlying asset for an agreed upon price on or before a specified date. A typical put warrant issued via blockchain methodology by a municipality would allow the holder to use specific cryptos to satisfy obligations to the government at a specified exchange rate, which is the strike price…”
https://seekingalpha.com/article/4178411