In what is sure to be a well needed shot in the arm for Bitcoin after a tumultuous few weeks in the cryptocurrency market, economists at the central bank of Finland have released a paper that calls Bitcoin’s economic system “revolutionary.” With the currency operating on a blockchain, the researchers contend that a degree of protection exists to make the system safe from those who wish to manipulate it. The group finds that:
Bitcoin is a monopoly run by a protocol, not by a managing organization. Familiar monopolies are run by managing organizations with discretion to determine and then change prices, offerings and rules. Monopolies are often regulated to prevent or at least mitigate their abuse of power.
The researcher go even further to say that Bitcoin cannot be regulated. “There is no need to regulate it because as a system it is committed to the protocol as is and the transaction fees it charges the users are determined by the users independently of the miners’ efforts.”
It must be noted that the views expressed in this paper do not represent the official stance of the Bank of Finland.
Other nations have been joining in on embracing Bitcoin and cryptocurrency. A few weeks ago, Vietnam announced that it will begin the process to legally recognize cryptocurrency by the end of 2018, then adding framework to tax it by 2019. While, not official, this research points that Finland may be headed in a similar direction.
Other nongovernmental experts are also lining up to support cryptocurrencies. Some are even suggesting that crypto could become a valuable supplement for pensions, bringing retirement back to the realm of reality for future seniors.
Of course, how something looks on paper isn’t always how it works out in practice, especially when discussing systems as complex as structuring economies. However, Bitcoin is notable for the progress it has shown thus far. We will remain vigilant to how the cryptomarket grows and the blockchain platform evolves with it.
Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.