An official from Spain’s central bank, the Bank of Spain (BDE) believes that Bitcoin (BTC) is unable to resolve the issues faced by major payment systems. BDE’s Deputy General Director for money innovations and market infrastructure, Salim Colesa, gave his opinion on the leading cryptocurrency in a very report published on Sunday, Feb. 17.
The study dubbed "Bitcoin: an answer for payment systems or a solution in search of a problem?," is marked as an “occasional paper,” as per Top Market Group en Español. This implies that the Bank of Spain doesn't essentially share the stance of the author.
Colesa compared Bitcoin to traditional payment systems and monetary intermediaries. First, he says that the Bitcoin blockchain processes solely 250,000 transactions daily, that may be a comparatively small volume for a worldwide system. as an example, major Spanish retail system, the Sistema Nacional de Compensación Electrónica (SNCE), reportedly handled around 7.2 million payments daily, as of 2017.
Given that the miners need to approve transactions, Bitcoin payments are slow, and also the time needed for a transactions is supposedly unpredictable. Thus, the Proof of labor (PoW) after all limits the capability of the entire system rather than yielding edges, Colesa concludes. The report additional states that the absence of governance and coordination impedes enhancements to the system.
According to Colesa, the mix of personal and public keys may be a terribly unreliable system that's liable to numerous kinds of fraud and scams. Moreover, the report states that loss of private keys implies that users’ funds will never be restored.
The report echoes the stance of some Bitcoin sceptics, like Nouriel Roubini, who believe that crypto is after all very centralized. as an example, crypto has commissions for transactions, and also the payment speed depends on its rate. the common rate is ready by mining pools, which, as per the expert, have enough power to regulate the system so as to urge additional rewards. Colesa concludes:
“It is unlikely that Bitcoin in its current modification can have any important impact on the finance sector as an alternate to traditional payment systems.”
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