Treasury Secretary Janet Yellen warns of ‘extremely inefficient’ bitcoin

Treasury Secretary Janet Yellen issued a warning Monday about the dangers that bitcoin poses both to investors and the public.

Despite a sharp slide in price to start the week, the cryptocurrency continues to trade above $53,000 as it has received boosts from various sources. Elon Musk’s Tesla recently made a substantial purchase and has said it will accept bitcoin for transactions.

However, Yellen said there remain important questions about legitimacy and stability.

“I don’t think that bitcoin … is widely used as a transaction mechanism,” she told CNBC’s Andrew Ross Sorkin at a New York Times DealBook conference. “To the extent it is used I fear it’s often for illicit finance. It’s an extremely inefficient way of conducting transactions, and the amount of energy that’s consumed in processing those transactions is staggering.”

Mining bitcoin requires users to solve complex mathematical equations using high-powered computer setups. The electric consumption used in the process leaves an annual carbon footprint equal to the nation of New Zealand, according to Digiconomist.
In addition to consumption concerns, bitcoin also is considered to be a tool of those involved in a number of illegal activities because its use is difficult to trace.

Then there’s volatility, as the cryptocurrency’s price has seen rapid peaks and valleys during its existence.

“It is a highly speculative asset and you know I think people should be aware it can be extremely volatile and I do worry about potential losses that investors can suffer,” Yellen said.

Various government agencies have contemplated the idea of making an alternate digital currency with the hopes that it would open up the global payments system to those who don’t have access.

The Federal Reserve, where Yellen once served as chair, has studied the issue and discussed the possibility of a new digital currency along with a payments system it expects to roll out over the next several years.

“I think it could result in faster, safer and cheaper payments, which I think are important goals,” Yellen said.

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[ericp]

A central bankster hating on something designed to be an alternative to central banking? Shocking.

[meatinurmouth]

Okay guys a 90 year old government lady told us it’s inefficient. Guess we should probably sell

[MaxFernandez]

America needs younger people in its government ASAP, these dinosaurs do not understand the world we live in.. how on Earth can they govern then??

[sickmsmokey]

I bet she still has a blockbuster membership...

[JusdevTMG]

2 things you can't trust, the news and the government.

[jakestephens]

My 90 year old grandma who doesn’t know how to sign into her Facebook account is exactly who I want to hear from about technology...

[Countcho]

It competes with the dollar. She wont like it

[happymask]

Maybe if Bitcoin gave her $800, 000 in speaking fees she would be for Bitcoin.

[goatmonkey]

The dollar is used WAAAAY more for illicit activities. It's not close.

[NevermindtheRedundants]

“Extremely inefficient” aka harder for us to control you.

[SAL-fsmr]

Janet Yellen: "Bitcoin is inefficient"

It’s true. You can’t just decide to print more Bitcoin at the click of a button - like the US Dollar.

So terribly inefficient!

[jeunec]

Receiving 800k from hedge funds is extremely inneficient aswell Janet...

[dragoncha]

I don’t let my grandma do my finances.

[eurojay]

If the reptile demon Yellen is against it I love it more than ever now

[JogBird]

she's just upset that bitcoin is beyond american jurisdiction

[deanalbertson]

How much energy is used in printing and distributing the dollar? Answer that one, Janet.

[timjennings]

And she’s an expert.. just goes to show you, don’t listen to any of them

[djbell]

This woman would rather just print fiat currency..

[johnwhiten]

That's hilarious, such total BS from her. She needs putting in an old peoples home.

[jquestdc]

It sounds like she just learned about BTC for the very first time.