Do Blockchains Need a Native Currency?
Many administrators in top banks and other financial institutions have shown disapproval towards the growing trend in cryptocurrency market. Likewise, the Governor of the Bank of Spain, Luis María Linde too lent his voice towards the criticism of cryptocurrencies. Although, he is in favour of the underlying technology, blockchain.
Linde believes that the technology has the potential to reduce the operational cost and improve efficiency. But he says that the risks associated with cryptocurrencies can outweigh all the aforementioned advantages listed for blockchain.
“In my opinion, their current use (of cryptocurrencies) presents more risks than benefits: they have low acceptance as a means of payment, suffer extreme volatility, present multiple operational vulnerability and have been related to fraudulent and illicit activities in many cases.”
Most people think that it is necessary for a coin to be in a blockchain, as it motivates the public to invest money in an ICO.
Taking into consideration the benefits that the blockchain technology offers, especially in the areas of financial solutions, is an idea that is growing in popularity. Several top banks and financial institutions are already in the process of implementing these blockchain technologies for their fluent functioning. Bank of America, alongside many big companies have acquired several blockchain patents.
In spite of all these acquisitions and implementations, these financial institutions do not hesitate a bit in criticising the elements that incite the technology, cryptocurrencies. The debate on “How far can blockchain go without cryptocurrencies?” has been going on over the years and across institutions and organisations.
Many crypto enthusiasts and propagators of public blockchains have insisted that the reason behind traditional institutions remaining critical of cryptocurrency is because of the control cherished by them rather than for purposes of objective regulation. Being in its emerging stages, the blockchain technology is often perceived as a decentralised, democratic, and self-regulatory technology.