Skip to main content
  1. Tech
  2. Gadgets & Tech
  3. Tech Gear

Seeking the stable electronic currency and the future of Bitcoin

See also

Bitcoin has been through several painful episodes over the past several months. There is a need for a stable electronic currency with sound financial management offers Robert J. Shiller, Nobel Laureate of Economics in the New York Times in print for Sunday.

Shiller questions the future of Bitcoin in the capacity of a sound crypto-currency which can provide a currency in the virtual world at an efficient cost for Exchange trade and merchants who accept it.

While in Davos, Switzerland last week at the Davos World Economic forum, the Nobel Laureate pronounced that bitcoin was a return to the dark ages because there is very little clarity surrounding the crypto currency. ‘It is a bubble; there is no question about it.... It's just an amazing example of a bubble,’ the Business Insider quoted Shiller.

He defines ‘bubble’ as a fad which gains momentum and increases in price due to the investors’ expectations without rationale justification.

He offers that Bitcoin does not supply a need at this time and has been developed based upon speculation. There is no reason to desert the central banking system at this point in favor of this new electronic currency.

Bitcoin has been through huge swings in price due to the volatility caused by illegal activities of questionable websites for laundering money, offering illegal activities as murder for hire and bankruptcy on Friday of the largest Bitcoin exchange in the world.

Venture capitalists have stepped in to provide responsible financial management with their Bitcoin Exchanges. Barry Silbert announced this past week that he wills set-up in March a U.S.-based regulated exchange for bitcoin crypto-currency investors.

Shiller offers that money should be thought in the manner as a unit of account. He provides Chile as an example which established in 1967 an inflation-indexed unit of account called the unidad de fomento (U.F.), meaning unit of development. Financial exchanges are made in pesos, according to a U.F.-peso rate posted on the website valoruf.cl. One multiplies the U.F. price by the exchange rate to arrive at the amount owed today in pesos. Everyone has an easy to use inflation-indexed unit. Chile is much more effectively inflation-indexed than other countries are around the globe.

The inflation-indexed unit of account from Chile can be enhanced in usage with software in the background; we can improve on the Chilean idea and make it more useful. He suggests using the simple term of ‘basket.’ It could be set against a country’s base value of currency and set to rise with inflation.

Shiller suggests that a card such as Pay Pal could provide transfer around the world to buy something by using the local currency amount in the basket adjusted for inflation for the price of an item and converting it via computer the currency in which the buyer uses to buy the product. Money could be sent via the Internet to people with this method of 'unit of basket.'

Shiller writes in the N.Y. Times article that, ‘Bitcoin has been a bubble. But the legacy of the Bitcoin experience should be that we move toward a system of stable economic units of measurement — a system empowered by sophisticated mechanisms of electronic payment.’

Web-based transactions need to be made easier and avoid the theft online, however. There is still more to ponder on Bitcoin and its future. Perhaps, the Bitcoin legacy is yet to be written and venture capitalists will provide an empowered route for the crypto-currency.

Robert J. Shiller is Sterling Professor of Economics at Yale and shared the Nobel Prize in Economics in 2013 with Eugene Fama and Lars Peter Hansen.

To find more article of interest for Bitcoin and Nobel Prize to Shiller, please, see the list below in Author’s Suggestions and the video atop this article from Newsy on the Mt.Gox bankruptcy and views for the future of Bitcoin.

I am on Twitter Victoria Wagner @ victoriaross888

Advertisement

Related Videos:

  • Taste Savant unveals Blackbook feature
    <iframe width="560" height="315" src="//www.youtube.com/embed/EjwJBZ3QHog?VQ=HD720&amp;allowfullscreen=true&amp;autoplay=1"></iframe>
  • Three for the kitchen – at home or on the road
    <iframe width="560" height="315" src="//www.youtube.com/embed/yeJliXwZzYM?rel=0?rel=0&amp;VQ=HD720&amp;allowfullscreen=true&amp;autoplay=1"></iframe>
  • Gadgets
    <div class="video-info" data-id="517585195" data-param-name="playList" data-provider="5min" data-url="http://pshared.5min.com/Scripts/PlayerSeed.js?sid=1304&width=480&height=401&playList=517585195&autoStart=true"></div>