The Bank for International Settlements just told the cryptocurrency world it’s not ready for prime time — and as far as mainstream financial services go, may never be.
In a withering 24-page article released Sunday as part of its annual economic report, the BIS said Bitcoin and its ilk suffered from “a range of shortcomings” that would prevent cryptocurrencies from ever fulfilling the lofty expectations that prompted an explosion of interest — and investment — in the would-be asset class.
The BIS, an 88-year-old institution in Basel, Switzerland, that serves as a central bank for other central banks, said cryptocurrencies are too unstable, consume too much electricity, and are subject to too much manipulation and fraud to ever serve as bona fide mediums of exchange in the global economy. It cited the decentralized nature of cryptocurrencies — Bitcoin and its imitators are created, transacted, and accounted for on a distributed network of computers — as a fundamental flaw rather than a key strength.
As the size of so many ledgers swell, the researchers found, it would eventually overwhelm everything from individual smartphones to servers.
“The associated communication volumes could bring the Internet to a halt,” the report said….
“Put in the simplest terms, the quest for decentralized trust has quickly become an environmental disaster,” they said.
Eulogy made by Bank for International Settlements (BIS)