Governor of the Bank of England warns of Bitcoin

The new head of the Bank of England, Andrew Bailey, has reiterated his negative stance towards Bitcoin, and investors are warned that they “should be prepared to lose all your money”.

During a hearing of the special Committee of the British Parliament on Wednesday, Bailey said on 16. March is officially the office of the Governor will take over that Bitcoin had “no intrinsic value”. There is no guarantee for the value of Bitcoin,“ he said:

If you want to buy Bitcoin, be prepared to lose all your money […] But understand what you have, it has no intrinsic value.

BREAKING: The Bank of England governor-designate, Andrew Bailey, says those holding bitcoin should “be prepared to lose all of your money” and “bitcoin has not caught on much.”

ok bankers pic.twitter.com/eu4bolovWf

Block folio (@block folio) March 4, 2020

The newly appointed Governor acknowledged, however, that Bitcoin has an “extrinsic value”, in other words, that the value of the other factors is derived as to its actual Use – which is quite the philosopher, if you think about it. One could argue, for example, that Gold has no intrinsic value. Instead, it derives its value from an economic context. And that is exactly what happens right now, because the price of gold rises, the uncertainties of the world economy.

The main point of dispute in connection with Bailey’s allegations, however, was the idea that Bitcoin “has not achieved much”, which led to the new Favorite buzzword of the crypto-community: “OK bankers”. On Twitter a user is referred to data from Statista, which show a nearly 500% increase in users of crypto-currencies in the last four years.

“The number of Cryptocurrency users is increased from 8.95 million on 44,69 millions of users […] And we should recommend to this Banker, that he is good with Numbers? #OKBanker“

the Tweet was. Baileys is nothing New are comments. The former head of the Financial Conduct Authority (FCA) has maintained since 2017 a pessimistic attitude towards crypto-currencies. In an interview with BBC Newsnight the end of 2017, he struck a similar tone, and describes: “If you want to invest in Bitcoin, be prepared to lose all your money”.

“If you want to invest in Bitcoin, be prepared to lose all your money” warns the head of the Financial Conduct Authority Andrew Bailey #newsnight pic.twitter.com/WRIwYOPCYQ

— BBC Newsnight (@BBCNewsnight) December 14, 2017

In spite of the chronological progress of the entry of Bakkt and even a comprehensive investigation about the benefits of a digital Central Bank currency – remains the view of Bailey on Bitcoin grim. Bailey is not the first politician to give an opinion negative towards Bitcoin and well-known arguments put forward. The last Bitcoin was brought because of alleged money laundering, terrorist financing and the financing of criminal activities in a bad light.

Ripple’s CEO, Brad garlinghouse most recently caused headlines when he accused Bitcoin and Ethereum of an unnaturally high power consumption. According to a new report Bitcoins of CO2 emissions should be 36,96 million tons, and thus just as high as new Zealand. Although it is a rough estimation of the values of the company Digiconomist, however, these values in many of the media were kicked wide apart. The report (freely translated):

(…) As the Bitcoin bubble in 2018, burst, and prices from a peak of almost 20,000 $ (15.600 £) by the end of 2017 under 4,000 $ (3.135 £) collapsed, crashed, the consumption is only increased again recently in the height.

Garlinghouse commented on Twitter (freely translated):

The energy consumption for BTC and ETH Mining is a massive waste, and there is no incentive to take responsibility for the carbon footprint. Absolutely (shocking) that this is not the case of the growing climate crisis to the top of the agenda.

The energy consumption of Ethereum is only 10% of the estimated volume of Bitcoin, and lay tbei 8 Twh. Ethereum will soon switch from Proof of Work to Proof of Stake as soon as ETH 2.0 is fully rolled out and thus the power consumption and CO2 emissions are significantly reduced.