Eswar Prasad, professor of international trade policy at Cornell University, said Bitcoin’s legacy is blockchain technology, which will be used by other projects such as digital currencies by governments and private companies.
Bitcoin, on the other hand, according to him, may not last long as it is not used as a medium of exchange due to its volatility, lack of scalability and also due to its high energy consumption. His speech took place in an interview with the program Squawk Box.
Despite this, it is worth remembering that Bitcoin’s focus is the security of funds, being an unquestionable asset, with its network operating for 12 years with few drops and with immutable transactions.
Blockchain is the legacy of Bitcoin
Prasad believes that Bitcoin is an outdated technology due to its lack of scalability, that is, the network supports few transactions per second, making it unfeasible to use it on a large scale.
Because of this, the professor says that Bitcoin may not last long and that its real legacy will be the use of blockchain technology by other currencies and payment services, such as central bank digital currencies, stablecoins and other private services, such as PayPal and WhatsApp, for example.
“There are new technologies, developing new cryptocurrencies that are using blockchain technology more effectively, so I believe the promise of decentralized finance using blockchain technology is real, but Bitcoin alone may not last long”
Complementing his reasoning, Prasad also noted that Bitcoin is not used as a medium of exchange, that is, as money, claiming that stablecoins or CBDCs will be able to play this role more effectively.
Only those who don’t understand it don’t have bitcoin
One of Bitcoin’s main appeals is to work without a central entity, making it impossible to bring it down, and its currency model, with a maximum offer of 21,000,000 coins, is also another great attraction for investors.
In the case of CBDCs, for example, they will continue to have the same old problems, losing their purchasing power year after year due to government mismanagement.
On the other hand, stablecoins, in addition to being backed by state currencies, also have a central point of failure, which can be dropped or fail to meet their obligations. Because of this, it is better to be exposed to BTC price fluctuations than government corruption.
Finally, it is worth remembering that the lightning network, Bitcoin’s second-tier solution, is experiencing great growth, mainly due to the adoption of Bitcoin as legal currency in El Salvador.