A new report from the Bank of International Settlements (BIS) in Switzerland has claimed Bitcoin would “bring the internet to a halt” if used as a mainstream payment method in the retail sector.
The report also claimed that Bitcoin was a “poor substitute” for state-backed currency as the BIS says “trust can evaporate at any time because of the fragility of the decentralised consensus through which transactions are recorded”.
BIS said the average smartphone would struggle to store the data required within “a matter of days” as “millions of users exchanged files on the order of magnitude of a terabyte”.
The Bank of England has examined the implications of an unplanned central bank backed digital currency, however this has “not produced a strong case for immediate issuance” according to BIS.
Basel-based BIS, known as the ‘central banks’ central bank’, said trust in Bitcoin’s stability has been “lacking”. The bank also added that the “vast energy use” of Bitcoin was highly inefficient, with the energy used for mining equal to that used in the entire Swiss economy.