Former US Secretary of the Treasury under President Bill Clinton and past President Emeritus of Harvard University Lawrence Summers seems to be impressed by Bitcoin as he admits that Bitcoin is a “very, very important development.” His views came to the public when he was addressing a gathering at the National Association for Business Economics policy conference.
It was not just Bitcoin that he was talking about; rather, he addressed a myriad of topics on finance and US stimulus tapering, budget deficit and more. He showed his concern about the US Federal Reserve’s quantitative easing strategy. However, what caught the attention the most was his views on the virtual currencies such as Bitcoin.
Talking to the gathering this former US Secretary of the Treasury said that he sees Bitcoin as part of a broader transition in which information technology is affecting more aspects of American life. Though he is not the first person who believes that Bitcoin can play a vital role as even former Fed head Bernanke too had a similar view.
His key point was that there are several painful practices/provisions in the current financial system that must be set aside and one of them is that customers go through a lengthy process. However, with Bitcoin at service, this issue can definitely be solved. According to Lawrence Summers Bitcoin is an innovative approach to reducing financial friction.
People Outside of Silicon Valley Often Don’t Understand New Inventions’ Massive Impact
He even went on to suggest that Bitcoin could be only part of a larger concerted effort by the industry to attack these longstanding consumers’ difficulties. Comparing Bitcoin to other innovations that have emerged from California’s famed Silicon Valley, which was though once denounced, has generated “an enormous deal”.
Taking cognizance to the fact that many economists are skeptical about Bitcoin’s implications for economics; Lawrence Summers suggested them that they don’t necessarily have a track record for correctly predicting the outcome of technological advancements. He said that very serious economists thought that the Internet was going to be no more important than the fax machine; however, they have been proved wrong.
Similarly, according to him economists should not undermine and dismiss Bitcoin as what he has seen in his lifetime that some things that came out of Silicon Valley that seemed very flakey to people on the outside and then proved to be an enormous deal.
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