Paul Donovan, the chief economist of financial giant UBS is in today’s crypto news for reiterating his position about cryptocurrencies that he believes they have no future.
While talking to CNBC, Donovan explained that all cryptocurrencies are flawed and can’t really go mainstream. According to him, bitcoin and other cryptocurrencies increase to ridiculously high levels towards the end of 2017 and that should have been obvious that it would end badly.
The biggest flaw with cryptocurrencies is that they cannot become a store of value by saying:
‘’Every economist knows that a store of value is about balancing supply and demand. But with cryptocurrencies you cannot control that supply in response to a drop in demand.’’
He went on to that the only thing cryptocurrencies could achieve a widespread adoption in failed states. This conclusion comes as a response to the Federal Reserve Bank of St. Louis issuing a white paper suggesting that cryptocurrencies can prove to be useful in countries with a high devaluation of their fiat currencies.
‘’ If you don’t have a government, then society gets a little bit more anarchic and in that situation, something like cryptocurrency can be useful does still come true,’’ continued Donovan.
In the interview, Donovan claimed that all of the crypto creators lack general economic knowledge. He says that creators of cryptocurrencies are brilliant at math but still don’t know about economics. He says that real value comes from matching supply and demand and that crypto supply can go up but it cannot go down. However, crypto demand can go down and it was created by blind faith and not ‘’ real economics’’.
Russian State Duma To Review Crypto Regulation: Preparing For Oil-Backed Crypto
“Perhaps the oil-backed cryptocurrency will be the pioneering project that will create a reliable structure for the cryptographic market as a whole," he concluded.
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New Privacy Mechanism For ETH Smart Contracts Developed By Stanford Researchers
“We describe an extension to Zether that can also hide the sender and receiver involved in a transaction among a group of users chosen by the sender. Though the overhead associated with anonymity scales linearly with the size of the group, no trusted set-up is needed and no changes to the underlying smart contract platform are required.”The report specifies that the Zether contract will never transfer funds without checking a transfer proof in order to prevent illegal transfers. This new design makes sure that the security of Zether depends on itself and not on third-parties or outside smart contracts. All of the privacy coins that provide users with a higher level of anonymity are still receiving mixed feelings from the community. For example, Charlie Lee declared he is focused on making Litecoin more fungible and private and to implement confidential transactions sometime in 2019.
Two Ohio-Based Companies Officially Paid Taxes With Cryptocurrency
“We will never accept won or renminbi or francs or cryptocurrency, or any other currency. You have to relieve your debts to the state of Ohio with U.S. dollars. That’s what we’re currently accepting. This platform just allows for that exchange, basically before that debt is settled to the state of Ohio.”Sprague pointed out that the treasury is reviewing how the program can be expanded and they are looking into the potential risks that can come up by using this method of tax payments. Ohio is working hard to attract blockchain-related businesses to the state. The state has already passed a law allowing businesses to pay taxes in crypto but the State Treasurer Josh Mandel stated that the legislation ‘’pants a flag’’ in Ohio regarding cryptocurrency adoption. Two days ago, the County Auditors’ Association of Ohio announced the gathering of a group that will work to explore the benefits of blockchain in real estate and transfer of land titles.
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