bitcoin (btc) The European Central Bank (ECB) has claimed that it will soon begin a “journey to irrelevance” and is mostly used for illegal purposes. But according to an on-chain expert, the claim is without merit.
writing in blog Post Published on Wednesday, the ECB said that “bitcoin is rarely used for legal transactions,” and called the network for making payments “cumbersome, slow and expensive.”
“Bitcoin has never been used to any significant extent for legal real-world transactions,” the eurozone’s central bank wrote.
Bitcoin is “not suitable for investment”
The ECB said that “speculative bubbles” – which it sees as bitcoin – rely on new money flowing in to sustain themselves. But according to the blog post, bitcoin is not suitable as an investment because it does not generate cash flow, pay dividends, or have any other use outside of money.
“The market valuation of bitcoin is therefore based purely on speculation.”
The authors directly challenge the longstanding belief in bitcoin that many of its supporters have held, saying that the relative stability of its price at this point in time is just a respite on the way to “irrelevance”:
“For bitcoin supporters, the seeming stabilization signals a respite on the way to new highs. More likely, though, it is an artificially induced last gasp before the road to irrelevance – and FTX busted. This could have been predicted before and sent the bitcoin price below USD16,000.
The post, which also appeared as an opinion piece in German business newspaper Handelsblatt, was written by Ulrich Bindseil and Jürgen Schaaf, both part of the ECB’s Market Infrastructure and Payments Division.
The US Dollar Is More Used In Crime Than Crypto
Taking to Twitter to refute the blog post, Joel John, Venture Lead at crypto investment fund Ledger Prime, said that the share of illegal transactions in crypto is much lower than the use of the US dollar for illegal transactions, 0.15% vs. Sharing 5%.
Joel said the share of crypto transactions considered illegal is shrinking, noting that on-chain transaction volume grew nearly sixfold in 2022, while illegal transactions grew by only 79%, or less than twofold.
Finally, Joel pointed out that the argument that bitcoin and crypto are linked to crime is flawed because as a technology emerges, an increasing proportion of incidents will surely be linked to it.
“We no longer say ‘internet-connected accident’ or ‘mobile app-connected suicide’ – both events are as horrific as they are,” he said, before adding at the end:
“Prejudice is easy, but it doesn’t provide progress.”
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