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- According to Robert McCauley, Bitcoin has no value as it promises nothing, unlike stocks & bonds
- He also states that a crash of Stable coins pegged to the dollar could easily disrupt the entire crypto ecosystem
- He also believes that only miners of Bitcoin genuinely benefit from the token.
Currently, the Crypto sphere is by far the most debated sector in the world, especially when Bitcoin began to catch the attention of the investors; while some consider it as an asset, perhaps the digital version of gold, few see it as the potential to replace the fiat system. While being renowned for mathematical purity, Bitcoin also has its share of critics who raise genuine concerns regarding the same.
Recently, Robert McCauley, an associate member of the faculty of history at Oxford, stated that the most famous & most expensive cryptocurrency is worse than a Ponzi Scheme while pointing out that investors who embrace the token are not guided by generating an income through impact but speculation as it is a zero-sum for long term returns that promises nothing.
McCauley seemed to contrast cryptocurrencies with other financial instruments like Stocks or Bonds, whereby virtue the contracts are bound to create income, regardless of whether the investors speculate the value of share or a bond where he mentioned that Bitcoin has no fundamentals to make money unless their holdings are sold to the other person.
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McCauley also raised concerns that a crash in stablecoins pegged to the dollar could be the tipping point for Bitcoin as it will also disrupt the whole crypto ecosystem. Further, he pointed out that Bitcoin’s cash flow is similar to a penny stock used for pump & dump schemes while investors only buy tokens in the desire of selling them to someone else for a more significant amount of money.
He further predicts that Bitcoin will keep having such Pumps & Dumps while fear of missing out (FOMO) being a catalyst, leading to a different ending than regular Ponzi schemes. He further distinct Bitcoin from Ponzi 101, where Bitcoin uses more energy which makes it resource intensive.
Similar to Ponzi schemes, The oxford faculty points out that only miners on the whole ecosystem have guaranteed profits where they can claim their token as long as the network is up & about. McCauley now adds to the huge group of sceptics that usually raise genuine concerns in regards to cryptocurrencies, who have dismissed the current structure into the financial world as it seemed ill-legitimate to them.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
