Key Takeaways:
- A high ranking official of the European Central Bank, Fabio Panetta, believes Bitcoin creator Satoshi Nakamoto did not understand money and payments.
NEW DELHI (CoinChapter.com) — Fabio Panetta, an executive board member of the European Central Bank, issued a serious accusation against Bitcoin creator Satoshi Nakamoto. He argued that Nakamoto did not have an in-depth knowledge of money issues while warning investors against cryptocurrencies.
Panetta noted these points in his speech ‘For a few cryptos more: the Wild West of crypto finance,’ at the Columbia University. The ECB board member compared the excitement surrounding cryptocurrencies to the greed and excitement of the Wild West.
In detail, during the gold rush of the 1800s, Americans migrated westward to take advantage of the gold rush. However, the promise of riches turned the community against each other, with the rampant lawlessness giving the region the moniker of Wild West.
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Panetta noted that the software developers who created Bitcoin believed they had created decentralized digital money. However, despite the technical brilliance of the Bitcoin white paper, Panetta argued that it didn’t show an understanding of payment and money issues.
Panetta argued that Nakamoto’s goal was to create an ‘anarchistic utopia of a stable currency.’
The ECB executive noted the growing popularity of cryptos. Additionally, he also acknowledged the ecosystem developed around cryptocurrencies. However, he stated that the crypto market is a bubble, adding Satoshi’s dream of a trustworthy digital currency is farfetched.
Panetta Takes A Dig At Cryptocurrencies
Meanwhile, Fabio Panetta took the opportunity to share his list of crypto shortcomings. First, he highlighted the long transaction times plaguing cryptocurrencies. For example, an average BTC transaction takes about 10 mins.
Although several blockchain projects claim short transaction times as their USP, transaction times remain an issue for crypto transactions.
Additionally, Panetta also pointed out how most cryptocurrency transactions are traceable. Cryptocurrency proponents often highlight the anonymity that comes with crypto transactions. However, blockchains are essentially publically accessible ledgers.
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As such, with regulatory bodies necessitating KYC norms, tracking regular crypto transactions is possible., with privacy tokens being an exception. In addition, Panetta stated that decentralization, another key aspect of the cryptocurrency ecosystem, is also under threat.
A large majority of crypto holders rely on intermediaries, contrary to the avowed philosophy of decentralised finance.
Fabio Panetta pointed out the danger to crypto’s decentralization
Panetta gave the example of El Salvador, the first country to adopt Bitcoin as legal tender. He highlighted how crypto payments in the country rely on a centrally managed wallet, thereby rendering a fatal blow to the decentralization aspect of cryptocurrencies.
Moreover, the ECB executive compared the crypto market to the sub-prime mortgage market, which triggered the global financial crisis in 2008. Panetta argued that in the absence of regulatory controls, cryptocurrencies drive speculation through fast and high returns.
He warned investors not to repeat past mistakes by waiting for the bubble to burst.
