This article was originally published here.
Although virtual currencies have been expanding all over the world, there are still critics that believe that they are completely useless. One of these individuals is the cryptographer and technology researcher at Harvard University, Bruce Schneier.
After talking about debunked points related to Bitcoin (BTC), he said that the goals set on the Bitcoin whitepaper have been defeated by the reality of its deployment. According to him, Bitcoin is difficult and risky to use and it also fails to deliver on its basic premise.
He explained that it was created to provide electronic transactions without having to rely on trust, but the whole system and its blockchain technology shows that it cannot function without trust. Thus, this defeats the purpose of having an uncontrolled system.
Miners are those in charge of confirming transactions and users have to trust them that they will be doing their job properly and that Bitcoin’s system will not crash. Indeed, Bitcoin put way trust from humans and placed it in technology. However, in many cases, the security of technology is also not guaranteed.
About it, he mentioned:
“If your bitcoin exchange gets hacked, you lose all your money. If your bitcoin wallet gets hacked, you lose all of your money. If you forget your login credentials, you lose all of your money. If there’s a bug in the code of your smart contract, you lose all of your money.”
He went on saying that the same happens if there is a successful attack on the blockchain. This shows that it is also hard to trust technology rather than humans and people. And then he asked:
“Would you rather trust a human legal system or the details of some computer code you don’t have the expertise to audit?”
He has also commented that virtual currencies use large amounts of energy to operate. This is the case of Bitcoin that requires miners to verify the transactions using a lot of electricity. Some reports showed that Bitcoin miners consumed more electricity than countries such as Austria or Uruguay.
Although he has this negative point of view regarding Bitcoin and virtual currencies, there are several users that are starting to use digital assets to avoid authoritarian governments or even survive. This is the case of Venezuela, where individuals have been using Bitcoin and other cryptocurrencies to be able to pay for goods and services.