Economics professor Kenneth S. Rogoff, a cryptocurrency expert, said the currency’s present high valuation depends on its “near-anonymity.” This anonymity has permitted various criminal or illicit activities through bitcoin markets since the currency’s inception in 2009, including drug dealing, unlicensed gun sales, and donations to hate groups, he said.
But that anonymity may soon end—Rogoff said he thinks governments will probably want to identify bitcoin users in the future. “Small anonymous transactions with virtual currencies…would be desirable,” Rogoff said, but “large-scale anonymous payments would make it extremely difficult to collect taxes or counter criminal activity.”
Economics professor Jeffrey A. Miron, a libertarian economist, said he disagreed with the suggestion that bitcoin technology’s lack of a footprint makes it riskier than traditional paper currency.
“We’ve seen the transformation of all sorts of industries from being on paper or in some physical unit to being all electronic, and nothing bad has happened. Indeed, a lot of good stuff has happened,” he said.
“There’s no reason the government should be concerned about means of payment that are not regulated by the government,” he added.
Nonetheless, he said he is not optimistic that cryptocurrencies like bitcoin will remain unregulated.
“It [government]could let cryptocurrencies peacefully exist, and not accept them as a means of payment, and that’s what I think it should do,” Miron said. “But my guess is that sooner or later governments are going to regulate cryptocurrencies out of existence.”
Eulogy made by Kenneth S. Rogoff and Jeffrey A. Miron