Bank of Finland shows respect to Bitcoin.
During Bitcoin’s early years, people had been very skeptical to Bitcoin’s real purpose and existence, but years after, people are starting to embrace it and are now making it a part of their daily lives. Governments and banks are now considering cryptocurrencies to become a part of the industry.
Researchers from the Finnish Central Bank have asserted that the economic system of the digital currency Bitcoin is revolutionary.
In their September 5, 2017 report, Central Bank Research Hub economists Gur Huberman, Jacob Leshno, and Ciamac Moallemi stated that the virtual currency’s infrastructure provides a degree of protection against manipulation by bad actors through its protocol-layer dynamics.
Part of their report reads:
“Bitcoin is a monopoly run by a protocol, not by a managing organization. Familiar monopolies are run by managing organizations with discretion to determine and then change prices, offerings and rules. Monopolies are often regulated to prevent or at least mitigate their abuse of power.”
Other highlights of the report
The report also pointed out that because Bitcoin is run by a protocol, it does not need to be regulated. This is because the network always enforces Bitcoin’s code, and because users themselves determine fees (depending on how quickly they want their transactions confirmed)..
The authors also recommended that a deeper study on Bitcoin and its infrastructure should be conducted by other experts.
“[Bitcoin’s] apparent functionality and usefulness should further encourage economists to study this marvelous structure.”
Bank of Finland’s works on Blockchain technology and Bitcoin
It should be noted that the opinion of the researchers isn’t necessarily the official opinion of the Bank of Finland. Nonetheless, the document is still very important because of the central bank’s involvement with Blockchain and Bitcoin.
In 2016, the bank organized a seminar about Blockchain in its bid to support local research projects on the technology. The seminar attracted such participants as local academics, regulators, and companies.
Even though the report is technically only the opinion of a few individual researchers, it should be noted that as part of the Bank of Finland’s official research arm, their opinion likely carries significant weight.