Bitcoin is a “Bovine Excrement” Says UC Berkley Tech Researcher on Bloomberg’s ‘Odd Lots’ Podcast
Bloomberg’s Odd Lots podcast recently aired an episode in which a senior researcher at the International Computer Science Institute at the University of California-Berkley called bitcoin “bovine excrement.” The researcher in question was none other than Nicholas Weaver, who seemingly has not had many nice things to say about the cryptocurrency and underlying blockchain and distributed ledger technology.
Just around the same time last year, Weaver stated that cryptocurrencies are inefficient, unoriginal, ideal for criminal use, bug-prone, and foolish. In his own words, “In conclusion, it is a dismal space. Private and permissioned blockchains are an old idea—a good idea—just with a new buzzword on it. The public blockchains are grossly inefficient. The cryptocurrencies don’t work to provide anything against drugs and ransoms and stuff like that. Smart contracts are an unmitigated disaster unless you like comedy gold. And the field is just recapitulating 500 years of failures. So in the end, the only winning move is not to play—unless you like playing with flamethrowers.”
His latest comments were no better. He stated, “So what happened when the cryptocurrencies first came out in 2010 and 2011 is most people who looked at it with technical understanding went, ‘Oh, this is bovine excrement,’ and walked away.” He also added that blockchain is suited mainly only for criminal use.
“The big fatal flaw is that it doesn’t actually work as currency. If you can’t use it as a competitor to all the other actual digital currency systems we have, like, oh, PayPal…. All of these payment systems are vastly more efficient than the cryptocurrencies, unless you’re interested in criminal activity.”
Weaver also discussed that cryptocurrency will not have much success at all as funds because sellers will find themselves in a poor position when a buyer cancels a payment. Further, transactions can take minutes to settle and they cannot be reversed once they have been initiated. As a result, scammers can cancel payments and move the funds to their own wallets.
Worse yet, cryptocurrencies are not easy to store – especially for the average everyday person. He also discussed the concept of “merchant adoption,” which he described as “The dirty little secret is the merchants who say they accept cryptocurrency . . . aren’t actually accepting cryptocurrency.” In actuality, merchants use third-party services like BitPay, a platform that will convert cryptocurrency into traditional current, which is then sent to the seller.
He also touched upon bitcoin’s deflationary model, adding that “As we remember our economic history from the Great Depression, the only thing worse than inflation is deflation…These cryptocurrencies are supposed to be deflationary, which means if you, say, buy a pizza back in 2010, you end up dining on regret when (prices suddenly increase in a bull run).”
At the end of the day, Weaver has pointed out a number of questionable qualities associated with bitcoin. He also added that there are two factors that could lead to the end of bitcoin. First is the tether stablecoin and the second, is when mining becomes unprofitable. He shared, “There’s two things that can really burn the system with fire. The first is the federal government getting their act together and going after this cryptocurrency called Tether…. If Tether is destroyed, that…removes the entire bitcoin exchange ecology” and “Number two is…[a] death spiral situation.”