Minneapolis Fed President Neel Kashkari said that Bitcoin is for ‘toy collectors’.
He does not believe that bitcoin or other digital currencies are serious investment instruments.
At a town hall meeting in Pierre, South Dakota, Kashkari said:
“If you live in any modern advanced economy, I would stick with the dollar, I would stick with the yen and leave bitcoin for the, you know, toy collectors,”
“I don’t really think of bitcoin as a currency. I think of it as a novelty. The idea that these virtual currencies are ever going to compete with the dollar is hard to fathom,” Kashkari was quoted by CNBC as saying.
Although bitcoin is scarce, “the problem is the barrier for entry for anybody creating another version of bitcoin is zero,” Kashkari added.
Last year Kashkari said in a speech at the MN High Tech Association 2017 Spring Conference that the underlying technology of bitcoin, blockchain, has more potential than the cryptocurrency itself.
A blockchain is a list of records (blocks). The list is forever expanding. Each block contains transaction data as well as a timestamp. The system is ultra-secure and extremely efficient.
Blockchain “has more potential,” Kashkari said. “I would say the conventional wisdom now is that blockchain, the underlying technology, is probably more interesting and has more potential than maybe bitcoin does by itself.”
He also criticized how easy it is for new cryptocurrencies to be created.
“The problem I have [with bitcoin] is while it says, by design, you’re limiting the number of bitcoins that can be created, it doesn’t stop me from creating NeelCoin or somebody from creating Bobcoin or Marycoin or Susiecoin.”
Video – Bitcoin is a cryptocurrency
Most of us have heard of bitcoin and know that it is a cryptocurrency. However, very few of us really understand how cryptocurrencies differ from euros, dollars, pounds, yen, and other traditional currencies. This Market Business News video explains.