There are several individuals and enthusiasts that believe virtual currencies, including Bitcoin (BTC), are considered money. However, there are some academics and professors that do not agree with this theory.
This is the case of William Goetzmann, a Yale professor and a Pulitzer Prize recipient. He is also an expert on financial history.
Yale Professor Believes Bitcoin is Not a True Currency
In a recent article released by Yale Insights, Professor Goetzmann said that the cryptocurrency craze offers a glimpse of the social meaning of money and the difficulties of innovating on an effective system.
Goetzmann has initially expressed cautious sentiment towards Bitcoin (BTC). He said that there are some risks inherent to the technology. He has also mentioned that there is a demand for transferring and storing value outside the traditional financial system. However, he said that it is a challenge to figure out the fundamental value.
At the same time, he said that ancient forms of money were similar to cryptocurrencies since they were based on a ledger. He explained that Bitcoin is an accounting transaction rather than anything else and that with it users can send and receive payments.
Nonetheless, he explicitly said that Bitcoin must have a greater level of stability to be considered a reliable store of value.
On the matter, he commented:
“There are a few basic things any currency has to fulfil. It has to be a store of value. It has to be a unit of account. It has to be a method of transferring value. With Bitcoin, because it fluctuates so much, it is not a particularly good store of value. Until it overcomes that particular feature, it is not a great currency.”
In general digital assets tend to have very volatile prices. Indeed, a digital asset could move in a single day over 20% up or down. Thus, the market is very volatile and prices fluctuate at all times.
Bitcoin will be maturing during the next few years. This will allow the digital asset to increase its stability and also to be recognized by a larger part of the society as a store of value.