Last year, Bitcoin took the cryptocurrency world by storm, with its value skyrocketing to as high as $20,000 during one point. However, since then, its value has witnessed a downward trend, with no major spike recorded in recent months.
A recent report from the Bank for International Settlements (BIS) has put the cryptocurrency boom in unflattering terms. According to BIS, any further growth of digital currencies could break the internet as we know it.
The Bank released a detailed and highly critical 24-page report on the crypto boom and indicated that the digital currency is less “trustworthy” as compared to sovereign currency.
The report issued several warnings about the storage capacity and processing capabilities of the devices that run transactions involving Bitcoins. Assuming that there is a complete switch towards the digital currency, the report has this to say regarding the storage capacity of devices that keep a record of Bitcoin transactions:
The size of the ledger would swell well beyond the storage capacity of a typical smartphone in a matter of days, beyond that of a typical personal computer in a matter of weeks and beyond that of servers in a matter of months.
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It further talks about the processing capabilities of those devices as well, saying that “only supercomputers could keep up with verification of the incoming transactions.” The report warns that:
The associated communication volumes could bring the internet to a halt.
The report questioned the authenticity and level of trust put in digital currency. It states:
In mainstream payment systems, once an individual payment makes its way through the national payment system and ultimately through the central bank books, it cannot be revoked. In contrast, permissionless cryptocurrencies cannot guarantee the finality of individual payment.
The Bank told that the stability of these currencies can’t be guaranteed as well as there is no central issuing authority. It also pointed out the fact that how cryptocurrencies potentially shield their customers involved in activities like money-laundering and financing of terrorism. The report also hinted at the ‘environmental disaster’ saying that the crytpo transactions consume too much electricity and are vulnerable to manipulation.
