Bitcoin has been having something of a rough time lately in terms of copping flak from governments and banks alike, and now the Bank of England’s governor has chipped in with his two pennies, calling the virtual coin a failure when measuring it in the traditional sense of a currency.
And, rather surreally, this comes at a time when action film actor Steven Seagal is endorsing a cryptocurrency which would appear to want to position itself as the successor to Bitcoin, given the name: ‘Bitcoiin2Gen’.
We’ll come back to Seagal later, but first off, Bank of England governor Mark Carney observed that Bitcoin falls short when it comes to two key aspects that a currency must possess: it must be a store of value, and a workable way to buy things.
As the Telegraph reports, talking to students at London’s Regent’s University, Carney said: “It has pretty much failed thus far on ... the traditional aspects of money. It is not a store of value because it is all over the map. Nobody uses it as a medium of exchange.”
Essentially, then, Carney’s argument is that nobody is buying things with Bitcoin, so it’s not a medium of exchange. It’s certainly true that the virtual currency hasn’t gone anything like mainstream for payment purposes, although there are limited use cases where firms accept Bitcoin (for example, some VPN providers will accept the virtual coin – and other cryptocurrencies in some cases – as users are obviously keen on keeping their anonymity online).
The other point – that Bitcoin is simply all over the place – is also difficult to argue with, given the highly volatile nature of the cryptocurrency as we’ve seen over the past few months. It hit massive highs of almost $20,000 (around £14,000, AU$25,000) in December, followed by a huge plunge last month, and has been very much pinballing around in value since.
What is it good for?
So, what is Bitcoin good for? Carney observed that its ‘underlying technology’ could still be useful in terms of verifying and authenticating financial transactions in a decentralized manner.
That’s a reference to blockchain, which as we’ve discussed before is a tech that could have major ramifications across a number of arenas and industries – not just banking but also the likes of cloud storage, car leasing and voting. Carney clearly believes it could be going somewhere, even if he doesn’t share the same conviction for Bitcoin.
Okay, so back to Steven Seagal, who also doesn’t believe in Bitcoin as such, but as mentioned is putting his celebrity weight behind a new cryptocurrency by the name of Bitcoiin2Gen.
Clearly hanging off the coattails of Bitcoin (but cleverly adding an extra ‘i’ into the name, which looks highly professional), this virtual currency aims to “empower the community by providing a decentralized P2P payment system with its own wallet, mining ecosystem and robust blockchain platform without the need of any third party”.
The creators note: “The inspiration of Bitcoiin2Gen is to make a superior or more advanced version of Original Bitcoin.”
Except that this cryptocurrency isn’t based off Bitcoin at all, and rather uses the Ethereum blockchain which is ‘safer and faster’ than Bitcoin’s blockchain, the makers observe.
It’s certainly clear that the cryptocurrency boom isn’t just about the explosion in value of existing virtual coins, but an explosion of pretenders trying to get in on the action and attract investment.
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