RBA (Reserve Bank of Australia) governor Philip Lowe is not a fan of bitcoin.
That news is about as shocking as hearing that Donald Trump isn’t a big admirer of Hillary Clinton.
Bitcoin, and cryptos in general, are proving to be a big headache for central and commercial bankers. They’ve grown accustomed to their monopoly over the control of currencies for the better part of a century.
Not only the supply of these currencies. But control over international money transfers. Bitcoin threatens all of that.
And Lowe, in typical central banker form, was quick to try and tie bitcoin to criminal activity.
From The Australian Financial Review:
‘Reserve Bank governor Philip Lowe said bitcoin was a “speculative mania” that was unlikely to become an everyday method for making payments, although it would be attractive to criminals…
‘When thought of purely as a payment instrument, it seems more likely to be attractive to those who want to make transactions in the black or illegal economy, rather than everyday transactions, he said.’
The idea that bitcoin enables black market activity is intended to alarm. It’s the same line Australia’s Black Economy Task Force trots out to tarnish cash transactions.
The reality is that bitcoin’s distributed ledger system — the blockchain — tracks and verifies every transaction. Meaning, it’s not really anonymous at all. At least not to powerful government agencies determined to uncover users’ identities.
In that respect, cash is still king.
Lowe was correct in pointing out one concern, though. The energy costs of mining new bitcoins and verifying existing bitcoin transactions are going through the roof.
Estimates vary. But ABC News thinks it’s more than the electric use in all of New Zealand.
You can likely see where this is going. Keep an eye out for headlines like, ‘Environmentalists unite against bitcoin’.
A headline that may well be followed by, ‘Bitcoin soars to new record highs’.