Both the Financial Industry Regulatory Authority and Dr. Nouriel Roubini, famed economist (also known as Dr. Doom) and a professor at New York Universitys Stern School of Business, recently expressed unflattering opinions relative to the crypto-currency
- Digital currency such as bitcoin is not legal tender. If no one accepts bitcoins, bitcoins will become worthless.
- Platforms that buy and sell bitcoins can be hacked, and some have failed. As a result, consumers can -- and have -- lost money.
- Bitcoin transactions can be subject to fraud and theft.
- Unlike U.S. banks and credit unions that provide certain safety guarantees to depositors, there are no such safeguards provided to digital wallets.
- Bitcoin payments are irreversible. Once you complete a transaction, it cannot be reversed.
In part because of the anonymity bitcoin offers, it has been used in illegal activity, including drug dealing, money laundering and other forms of illegal commerce. Abuses could impact consumers and speculators; for instance, law enforcement agencies could shut down or restrict the use of platforms and exchanges, limiting or shutting off the ability to use or trade bitcoins.
Dr. Roubini went even further stating that apart from a base for criminal activities, bitcoin is not a currency as it is not a unit of account or a means of payments or store of value. Dr. Roubini continued by saying that bitcoin "...is a Ponzi game and a conduit for criminal/illegal activities."
You may recall that in July of 2013 the Cameron and Tyler Winkelvoss started an
I hope bitcoin never made it into your portfolio or retirement plan. Dr. Roubini estimates that losses attributable to
Robert C. Lawton is President of Lawton Retirement Plan Consultants, LLC (