In an interview this week with CNBC, Goldman Sachs’ former CEO Gary Cohn said that, at some point, the world will see a global cryptocurrency and it will not be Bitcoin or rely on a proof-of-work (PoW) algorithm.
“I'm not a big believer in bitcoin. I am a believerin blockchain technology,” Cohn affirmed
during his conversation with Bob Pisani as part of the “Squawk on the Street” interview series.
“I do think we will have a global cryptocurrency at some point where the world understands it and it's not based on mining costs or cost of electricity or things like that,” Cohn added
“It will probably have some blockchain technology behind it, but it will be much more easily understood how it's created, how it moves and how people can use it,” he concluded
This comes a few days after his former employer, Goldman Sachs, announced the launch of its own Bitcoin trading desk, making it the first major Wall Street bank offering such service to its clients.
Are There Any Viable Alternatives to Bitcoin?
Writing for Wealth Daily, Alex Koyfman agrees with Cohn, who served up until March of this year as Donald Trump’s chief economic advisor.
Koyfman writes that because the cost of mining a single Bitcoin has skyrocketed, hitting $4,700 in the US and a whopping $26,000 in South Korea, it’s hard to see Bitcoin taking over the role of global cryptocurrency.
But which one will take over this spot?
, “In a world where cryptocurrencies now number more than 1,600, that question isn't an easy one to answer.”
“Even among the mainstream offerings, including the usual suspects like Ethereum, Litecoin, Ripple, and their various offshoots, it's hard to tell the difference or…explain the function,” Koyfman adds
Furthermore, Ian Edwards of BitsOnline suggests
proof-of-stake (PoS)—“a deterministic method of choosing the node who gets to add the next block to the chain”—as an alternative to the energy-intensive PoW Bitcoin currently relies on.
However, he also highlights a couple of problems when dealing with PoS.
First, he writes
that PoS “hasn’t been used successfully for extended periods of time, so it’s unclear whether a PoS blockchain would be able to fend off determined efforts by participants to disrupt or hack the network.”
Second, Edwards says
, “issues of coin distribution…could lead to some network participants colluding among themselves to the detriment of other users.”
Others are much less sanguine (to say the least) when it comes to Bitcoin and the future of cryptocurrencies.
Earlier this week, billionaire Warren Buffet, CEO of Berkshire Hathaway, told
CNBC that Bitcoin is the equivalent of “rat poison squared.”
Later on, during his company’s annual meeting, Buffet compared Bitcoin to gold, saying
, “If you had bought gold at the time of Christ and you figure the compound rate on it, it's a couple tenths of a percent.”
that Bitcoin and other cryptocurrencies are bound to “come to a bad ending.”
Adding fuel to the fire, Berkshire Hathaway’s vice chairman, Charlie Munger, took Buffet’s sentiments on investing in Bitcoin a step further.
“To me, it's just dementia. It's like somebody else is trading turds and you decide you can't be left out,” Munger said
Bitcoin & Cryptocurrencies Still Have Plenty of Backers
Despite this strong opposition to Bitcoin and those of its ilk, faith in cryptocurrencies remains relatively strong among many financial industry experts.
Nigel Green, deVere Group’s CEO, responded to Buffet and Munger’s antagonism towards Bitcoin.
“What I do find monumentally baffling is that two of the world's most successful investors cannot see the intrinsic value of some form of cryptocurrency," he wrote
"Do they honestly believe that there is no place for, and no value of, digital, global currencies in an increasingly digitalized and globalized world?" Green concluded
Furthermore, Nasdaq’s CEO, Adena Friedman, has said that there’s room for a cryptocurrency exchange once the market has developed enough.
“I believe that digital currencies will continue to persist it’s just a matter of how long it will take for that space to mature,” she recently said
Where do you stand? Let us know with a comment!