The 2001 recipient of the Nobel Memorial Prize in Economic Sciences, Joseph Stiglitz, voiced some strong opinions about Bitcoin in his latest interview with Bloomberg Television. Stiglitz is a former economic advisor to the Clinton Administration and chief economist of the World Bank; he currently serves as a Professor at Columbia University.
Stiglitz told Bloomberg that “Bitcoin is successful only because of its potential for circumvention, lack of oversight.” He continued, offering a harsh rebuke and recommendation for the future of the world’s most popular and successful cryptocurrency, “So it seems to me it ought to be outlawed. It doesn’t serve any socially useful function.”
This interview took place shortly after Bitcoin crossed yet another staggering milestone, surpassing $10,000 and even $11,000 in value. At these levels, Bitcoin is among the 30 largest currencies in the world.
Bitcoin is often a target of experts who predict its wild successes and others who forsee the bubble bursting. This rollercoaster valuation ride often gives each side evidence to support their predictions, yet Stiglitz points to regulation from Washington as a potential sniper’s bullet that could bring the entire currency down.
Earlier this year, Forbes contributor Jason Bloomberg questioned whether Bitcoin held any intrinsic value, that is, the currency’s value outside of the price tag that the market slaps on each coin. He was hard-pressed to find an answer, with many experts pointing to Bitcoin’s market value as its only real value. This question of value is an important part of determining the overall utility of the currency and either proving or debunking Stiglitz’s claim that Bitcoin lacks function.
Some experts point to various attributes of Bitcoin such as transparency and programmability as facets of Bitcoin’s utility, and therefore, value. However, others do not find this satisfying, Business Insider’s Joe Weisenthal writes, “Gold has real value because it’s shiny and can be used for jewelry…. But what about Bitcoin? If you ask Bitcoin believers why a bitcoin is worth anything at all, they will tell you about how amazing the technology is, and how it’s ‘programmable’ and how cryptography and pseudoanonymity are so great. But none of these are very satisfying answers.”
This volatility surrounding the currency will likely not die down anytime soon. The sheer unpredictable nature of Bitcoin only bolsters the differing sides, with dips allowing opponents to point toward inevitable collapse and spikes allowing the faithful to point out the currency’s resilience. Either way, only time will tell how the currency will fare. The growing pains of Bitcoin will continue to take us on a wild ride.