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What the experts are saying about bitcoin

Speaking at the World Economic Forum in Davos, Switzerland, Nobel prize-winning economist Robert Shiller hailed bitcoin as a “really clever idea”. Although he was impressed with the technology behind it, he was concerned that it had just “gone viral as a currency”.

He explained he thinks of bitcoin as 'an interesting experiment', although it lacks the value to become a 'permanent feature of our lives'.

Theresa May also spoke at Davos, expressing her concern that criminals were taking advantage of digital currencies, which can be used to anonymously transfer funds. “In areas like cryptocurrencies, like bitcoin, we should be looking at these very seriously,” May said.

Steven Mnuchin, The US treasury secretary, also flagged up concerns about misuse of digital currencies. He said his number one focus on cryptocurrencies is that we should want to make sure that they’re not used for illicit activities.

Digital currencies have been a key topic of conversation at Davos. Ethereum, a rival to bitcoin, set up its own lounge on the main promenade of the ski resort. In particular, banks are showing interest in the blockchain – the digital ledger that underpins a cryptocurrency.

Cecilia Skingsley, deputy governor of Swedish bank Riksbank explained that she thought bitcoin was too volatile to be classed as money, as they regularly fluctuate and is not a very efficient medium of exchange- highlighting the fact that people don't buy groceries, pay taxes or receive their salaries in bitcoin. 

However, some investors at Davos disputed the idea that bitcoin faced a rocky future. Jennifer Zhu Scott, of Radian Partners, said bitcoin was a “very lousy currency” and a “very lousy payment system” but insisted that it worked as an asset. “I don’t think bitcoin is disrupting currency or money. Bitcoin is disrupting gold,” she said.

Zhu argued that bitcoin was extremely efficient as a store of value, as there could only ever be 21m in circulation – and only about 16m have been created so far.