Bank of England, Andy Haldane recently mentioned that bitcoin is a harder money than the well-known gold standard. Andy Haldane was speaking at Bank of England/ Centre for Central Banking Studies Chief Economists’ Workshop while he made that statement.
Andy Haldane gave a presentation titled “Old Money, New Money” on digital currencies during the event where he and his team made a mention of bitcoin and reasoned that sustained adoption of bitcoin will cause deflation. In the same presentation, he went back to the basics where he discussed about the advantages and disadvantages of bitcoin.
According to Andy Haldane’s team, bitcoin can be easily described with respect to four important aspects.
- Distributed — the digital currency exhibits greater resilience without any central controlling authority over it. However, it also leads to coordination issues.
- Pseudonymous — Anonymity with respect to bitcoin transactions is not fool-proof. There is a possibility of achieving a certain degree of anonymity by following certain best practices, but still given the transparency associated with blockchain, bitcoin transactions can be called pseudonymous at best.
- Push only — Payments once made can’t be reversed and it has to be initiated by the sender.
- Individually cheap, but socially expensive. Bitcoin is just a digital token, but