We have written in the past that Warren Buffet, one of investment & finances brightest figures has not been exactly entertained by the idea of cryptocurrencies. Mr Buffet went so far as to spell a dire outcome for the majority of them. ‘It will end in tears,’ he predicted. While his ominous warnings have not yet born fruit, it is still advisable to navigate the murky waters of cryptocurrencies with caution.
Another critic has joined Mr Buffet, namely JP Morgan CEO Jamie Damon who have been rather more robust in his language when talking about cryptocurrencies.
Mr Buffet’s business partner Charlie Munger has also been inclined to criticise the crypto craze. Mr Buffett has been very specific about his aversion towards cryptocurrencies. He pointed out the complete lack of an intrinsic value paired with the patchy regulatory framework as the main problems of the cryptocurrencies.
Why Bitcoin Won’t Last?
More people have openly spoken against Bitcoin, saying that the cryptocurrency is unlikely to last. Nobel prize-winning economist Robert Shiller has been among the critics.
Mr Shiller professed that institutions and governments will actively seek to uproot the evil that is cryptocurrencies. He may have been partially right. China, which is a highly-regulated country, has decided to put the crack on all cryptocurrencies and ensure that it is the sole proprietor of all digital currencies, including the considered sovereign FIAT money to soon enter the market.
Mr Shiller Warns the Community
Mr Shiller spoke at the World Economic Forum and expressed his admiration for the concept of Bitcoin, labelling it a ‘really clever idea.’ Blockchain alone, Mr Shiller considered, was worth mighty appraisal.
However, he failed to see the real-world implication of Bitcoin as a currency, a medium of exchange where goods would be purchased for the said tokens.
Mr Shiller more broadly sees Bitcoin as an experiment that is designed to see to what extent digital money could be part of our everyday lives. With this in mind, it is still worth noting that Mr Shiller has predicted the fall in the price of Bitcoin on multiple occasions.
However, an observer may argue that Bitcoin is a volatile asset that is bound to fluctuate when it comes to monetary value. Prices will go up and they will go down inevitably. Of course, Mr Shiller’s forecasts cannot be chalked up to luck.
The Underbelly of Cryptocurrencies
Some have been concerned that cryptocurrencies may in fact be over-complacent with criminal activities. It has been long known that a quarter of all Bitcoin transactions are used to fund illegal operations that has in turn tarnished the good repute of the cryptocurrency.
With this in mind, British Primer Minister Theresa May used the pow-wow in Davos to forewarn leaders against the dangers of adopting Bitcoin on a larger scale.
However, criminals have moved past Bitcoin. While leaders are bickering over they should and how to regulate Bitcoin, Monero and Zcash have emerged as even more secure alternatives to carry out their clandestine activities.
Are the Critics Right?
In honesty, there is a reason behind the recent increase in attacks on cryptocurrencies. They are not as secure as we have expected them to be. Furthermore, they threaten the financial security of everyone who over-invests in them and it is understandable why people would be concerned.
However, some people, such as the citizens of South Korea have not been overly fond and interested in maintaining their investment high and soaring. It is however quite impossible to tell whether the critics are right with accuracy.
It is quite possible that digital assets will ultimately disappear.
And When Bitcoin Disappears, New Coin Will Take Its Place
Even if Bitcoin is dispatch into oblivion, it would be certainly quite the undertaking to actually disprove the validity of cryptocurrencies and people will most certainly want to participate in the lucrative segment that is digital assets.
On the other hand blockchain is simply too good to be overlooked. Blockchain ICOs have amassed billions worth of investment. Their monetary gain has translated into a host of new projects that promise to revolutionize virtually every industry known to man.
However, challenges persist. For instance, new startups hold no accountability. Investors just put down their money without having any guarantee that they will make a return on their investment. It is as simple as this and cryptocurrencies cannot promise that your initial investment will ever be recuperated.
Many experts from both camps believe that if people were less eager to jump the bandwagon and turn out a quick profit, Bitcoin and the fraternity of crypto coins would have stood a much better chance to join the mainstream.
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