Cryptocurrencies and the underlying blockchain technology have faced a lot of criticism over the years. This isn’t a surprise as every technology must find some form of resistance before it is massively embraced. The most recent attack on the cryptocurrency industry was from Bruce Schneier, a Harvard cryptographer who bashed Bitcoin and other cryptocurrencies in an op-ed interview.
Cryptocurrency Is Only Useful To Nefarious Groups And Individuals
According to Schneier, only nefarious individuals and groups have a use for cryptocurrencies. To the average individual leading an honest life, cryptocurrencies are useless. Only shady businesses and groups would be interested in moving money without alarming the government and other centralized authorities. Schneier made reference to many debunked and discredited points stating that the original purpose of Bitcoin was defeated by the reality of its development. What this means is that Bitcoin isn’t just risky and difficult but it has been unable to deliver on its promise as stated in the whitepaper and so it is useless.
Bitcoin (BTC) Price Today – BTC / USD
During the interview, Schneier talked about the issue of trust. According to him, this is the biggest failure of Bitcoin. He said that Bitcoin and other cryptocurrencies were created to enable trustless electronic transactions. However, looking at the infrastructure critically, you’ll see that it is almost impossible for it to function without trust defeating the purpose of a decentralized system.
Whether anyone wants to admit it or not, users of cryptocurrencies have to trust miners to follow the ideal sequences during the Bitcoin mining process to prevent monetary loss due to system crash according to Schneier. Schneier believes that Bitcoin has taken away trust from humans and handed it to technology that doesn’t have guaranteed security. In his words:
“If a Bitcoin exchange is hacked, you will lose all your money. If a BTC wallet is hacked, you will lose all your money. Maybe you forget to log out after visiting an exchange, you can lose all your money. If the smart contract gets infected with a bug, you’re still going to lose all your money. If the blockchain is hacked, you’ll lose all your money. So, in more than one way, it’s easier to trust people than to trust this technology. It is better to trust a human system that is legally regulated than to trust a computer code that you cannot audit.”
Bitcoins Has Hidden Charges And Constitutes Environmental Hazards
After attacking the technical accuracy of cryptocurrencies, Schneier moved ahead to the environmental impact. In his opinion, the massive energy requirements of Bitcoin and other cryptocurrencies make them environmental hazards. He doesn’t believe the energy consumption is worth the reward and this is another reason why cryptocurrencies are pointless according to him.
He also made mention of the fact that Bitcoin transaction fees are difficult to determine compared to centralized institutions that have charges that are easy to calculate. He believes Bitcoin transaction fees are hidden although it’s not clear how he came to this conclusion.
Finally, Schneier said that the immutable nature of blockchain technology is a problem as it makes it impossible to correct a mistake. In his words: “You can lose all your savings by making one small mistake”. This was his concluding point for defending his opinion that cryptocurrencies are useless.
What do you think about Schneier’s comments? Are cryptocurrencies truly useless to the regular person? Share your thoughts in the comment section.