NYU Professor Believes Bitcoin Was not a Response to the Financial Crisis
Bitcoin was created several years ago after the financial crisis that started with the bankruptcy of Lehman Brothers. With the creation of the famous virtual currency, a new financial ecosystem grew up and continued to expand.
However, there is an expert that believes that Bitcoin (BTC) was not created with the intention to fight against the current economic system.
David Yermack, professor of finance and business transformation at New York University says that Bitcoin appeared in 2009, but there were several attempts to create a digital currency such as BTC in the past.
Bitcoin works powered by a decentralized ledger known as blockchain. It is decentralized because there is no centralized entity controlling the supply or the environment. Instead, Bitcoin works with a wide web of nodes that protect the network and confirm that the transactions are valid.
Mr. Yermack commented about the current commerce on the internet:
“Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions it still suffers from the inherent weaknesses of the trust based model.”
Indeed, the fellow NYU professor and bitcoin skeptic Nouriel Roubini agrees with Yermack. He says that Bitcoin could be an experiment and that developers and supporters only care about money rather than in the protocol or the technology.
Nonetheless, there is some evidence that suggest that it was not launched at that moment because of ‘good timing.’ Maria Bustillos explained that Satoshi Nakamoto, Bitcoin’s anonymous creator, was motivated by the crisis. Indeed, he left a message on the blockchain on the genesis block on January 3, 2009.
The genesis block reads as follows:
Bitcoin supporters believe that the famous virtual currency could work as the new gold. Furthermore, they believe that Ethereum is the blockchain used by supply chains. At the moment, there are over 2,000 different cryptocurrencies that can be used in many different platforms.
At the moment, there are several libertarians and individuals that support Bitcoin as a way to escape from the current financial system. Of course, there are people that believe that is a scam but several institutions and companies are investing important sums of money on it.
According to Sarit Markovich, a clinical associate professor of strategy at the Kellogg School of Management at Northwestern University believes that Bitcoin may have been launched just on time.
“The quest to be decentralized can be tied to a financial crisis,” he says. “But it we didn’t have bitcoin it’s likely something else to challenge centralized payment systems would have emerged.”