Victor Ugochukwu · Dec 14, 2020 . 5min read
IMF digs archive, reposts video about cryptocurrencies
The video is not new as it first appeared in 2018 making most of the claims obsolete.
By Victor Ugochukwu · Aug 24, 2020 . 9min read
The International Monetary Fund, IMF, appears to have revisited its archive to dig and repost a video about cryptocurrencies it made earlier.
On its official Twitter handle, the International Monetary Fund posted a two minutes video titled: What are cryptocurrencies? The video started by describing the problems associated with the legacy banking system such as
- banks charge fees
- the need for trust
- long transaction settlement times
- these delay in settlement costs bank customers
Subsequently, the video went on to describe how cryptocurrencies work and what gives them unique advantages. The IMF mentioned that these new forms of payment help to include the bankless in global trade. This appears to be one of its most striking benefits of cryptocurrencies in the video.
Obviously, one would expect the IMF video about cryptocurrencies to include the pitfalls also. This is typical as the IMF represents legacy banking interests.
Posting about the pitfalls of cryptocurrencies, the video outlined the following;
- anonymous nature of crypto payments
- encrypted password system which may not be recoverable
- volatile nature of cryptocurrencies
- low throughput
- yet to achieve mass adoption
However, the IMF video about cryptocurrencies admits that some of these risks are surmountable. It also emphasized that some elements of cryptocurrencies could be selectively picked to revolutionize keys areas in buying and selling. According to the video too, cryptocurrencies can as well disrupt financial investment and savings and most importantly, regular bills payment.
IMF’s video about cryptocurrencies first appeared in 2018
Apparently, the video is not new as it first appeared in 2018. Clearly, some of the pitfalls in the video mentioned are anonymous nature of crypto payments and others. To begin with, when the video talked about the anonymous nature of cryptocurrencies, it can be assumed it’s talking about the fact that cryptocurrency payments are untraceable. Bitcoin and most other cryptocurrency transactions are highly traceable. Blockchain records transactions, which is a decentralized ledger accessible by anyone. Except for privacy coins, most cryptocurrency transactions are indeed traceable.
Furthermore, on the aspect of an encrypted password system which may not be recoverable, this is actually one of the core tenets of cryptocurrencies. Encrypted digital assets such as cryptocurrencies give users complete control over their funds/assets. This counters state censorship such as the government or regulatory authorities dictating through the banks on how a user can access their funds.
Still on pitfalls of IMF’s video about cryptocurrencies, as crypto enthusiasts like to say, volatility is a feature and not a bug. And more importantly, volatility has continued to fuel the speculative segment of the industry, which is worth 365 billion USD as at today. Moreover, even though Bitcoin may not be function well as a currency due to periodic rise and falls, making it a poor medium of exchange, stablecoins now entirely solve this issue. IMF’s video about cryptocurrencies clearly failed to mention this.
As for low throughput, as claimed in the video, many cryptocurrencies now have faster transaction confirmation times. Cryptocurrencies like Dash, Ripple, EOS to mention a few outpace Bitcoin and Ethereum in terms transactions speed.
IMF’s claim on crypto yet to attain mass adoption holds true, but should change sooner
Lastly, cryptocurrencies are not yet accepted globally as a means of payment, IMF’s claims here still holds true. However, with crypto banks making headway and big fishes like JP Morgan and other giants making bold bets on cryptocurrencies, the outlook for cryptocurrencies have never been brighter.
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