Joseph Stiglitz, the economist who won the Nobel Prize has called on bitcoin, the wildly popular cryptocurrency, to be outlawed.
During an interview on Bloomberg television, which was covered by American Banker, the economist said that bitcoin is successful because of a lack of regulation. “So it seems to me it ought to be outlawed,” Stiglitz said. “It doesn’t serve any socially useful function.” He noted that bitcoin is a bubble that is going to “give a lot of people a lot of exciting times as it rides up and then goes down.”
The Nobel Prize winner isn’t alone in expressing skepticism about the cryptocurrency. Earlier this month in an interview with CNBC, Goldman Sachs CEO Lloyd Blankfein said that “maybe bitcoin is a kind of a bubble,” adding: “I don’t like it. I’m not comfortable with it. I’m kind of an old dog to be absorbing that kind of a new trick.”
Goldman Sachs compared key characteristics of gold and bitcoin, revealing that when it comes to being assessed on the majority of the key characteristics of money, gold is the clear winner. When it comes to durability, gold also wins, because cryptocurrencies like bitcoin are vulnerable to hacking and are subject to regulatory, network and infrastructure risk during a crisis. In terms of intrinsic value, there’s a limited supply of gold and other precious metals in the Earth’s crust, whereas in the case of cryptocurrencies, it’s easy to create alternatives through initial coin offerings (ICOs).
Additionally, gold is better at holding its purchasing power and has a much lower daily stock volatility, while bitcoin/dollar volatility has averaged almost seven times that of gold in 2017.
Blankfein certainly isn’t the only CEO to criticize the digital currency. JPMorgan Chase CEO Jamie Dimon called bitcoin “a fraud,” while BlackRock CEO Larry Fink said it was an “index of money laundering.”