It can be difficult to imagine a harsher criticism of Bitcoin than recent statements made about the leading crypto on March 12 by Jeffrey Sachs, according to an article in Fortune. He basically said that the leading crypto was providing no value and was consuming vast amounts of electricity which is really bad for the environment. He also said BTC is like counterfeit money that people acquired after paying real money such as US dollars or other fiat currencies (and other real-world assets).
The well-known Columbia economist, whose comments came during the “All About People: Digital Transformation in Science, Education, and Art” conference, clarified that he’s “not a fan at all of Bitcoin.”
During the conference, which was supported by Alma Mater Europaea university in Salzburg, Austria, and the European Academy of Arts and Sciences, Sachs said that Bitcoin is not really a good store of value. It’s also not an effective medium of exchange, Sachs claims, while noting that Bitcoin provides “nothing of social value.”
Sachs is well known internationally for his work in supporting sustainable development initiatives and combating poverty globally. Notably, he thinks that Bitcoin is an enemy of our environment, and can be thought of as a hidden tax on people, including the rich and poor.
Sachs acknowledges that there’s a lot of potential for virtual currencies, however, he believes that these “decentralized” cryptos are not the answer. Instead, he proposes looking into a digital Euro or US dollar which could improve our financial ecosystem but would not require us to lose the ability to track illegal activities or attempts at tax evasion, Sachs claims.
He thinks that the problem with Bitcoin is that BTC mining is a huge waste of resources and a “highly polluting waste of power, a lot of CO2 emissions resulting from nothing of social value.”
Sachs also pointed out that it’s really surprising that prominent clean energy advocates like billionaire Elon Musk have become Bitcoin enthusiasts, with his firm Tesla Inc. acquired $1.5 billion worth of BTC (and also plans to accept the crypto as payment later on).
Sachs also questions where the “value” in Bitcoin is coming from. He explains that it came from people holding Euros and dollars, who then decided they would exchange it for Bitcoin which now has “value” somehow. Sachs appears to suggest that Bitcoin is diluting the value of Sovereign currencies. He compares this to “counterfeiting.”
“Because of the fact that financial markets can be bubbles that give value in terms of exchangeability to dollars and Euros out of thin air, Bitcoin does have a value of $1 trillion that buys the goods that can compete for the same goods that you or I with our bank accounts or dollars can also compete with. If someone was just printing Euros, you’d object. You’d say, ‘That’s illegal, that’s counterfeiting.'”
He also mentioned:
“I wish our central banks had said from the beginning, ‘No thank you, because you don’t get to print money, you don’t get to issue a substitute currency.’…I see no technical advantage compared to a digital Euro or digital dollar. The long and the short of it is that I regard not as social value, but value that has come at the cost of holders of traditional currencies.”