Billionaire Ray Dalio identifies the code of Bitcoin as the primary weakness in it, which makes it doubtful that it will become a reserve currency despite its increased popularity.
Recently, Billionaire investor Ray Dalio highlighted the Bitcoin code as the major weakness of the cryptocurrency. Posting his thoughts on the social network X, Dalio doubted that Bitcoin would serve as a complete substitute for traditional money.
Source – X
He brought to focus the dual role of money as a medium of exchange and a store of wealth. Dalio noted that although Bitcoin is making progress as an alternative source of money, its digital code is a vulnerability.
The fact that the ledger in the Bitcoin system is public, he said, renders it less secretive and therefore less desirable by central banks.
According to Dalio, central banks will hardly start using Bitcoin as a reserve currency since all transactions are transparent.
This transparency would be abused by governments, and regulatory forces would be able to tamper with the code or weaken it.
Dalio stated that there is a question whether the code can be violated or controls can be taken to diminish its effectiveness.
Nonetheless, he revealed that he owned a small bit of Bitcoin along with gold in his portfolio, where he admitted that its value is a substitute asset, but carefully.
Why Code Matters in Bitcoin’s Future
Bitcoin is blockchain technology-based, such that it is a decentralized registry that is kept by an open-source code. Although this model eliminates the idea of centralized control, it also has its own risks that are specific to Bitcoin.
The worry that Dalio has is that this code might serve as a subject of future weakness, either by hackers or restrictions imposed by the government.
Bitcoin does not have a centralized backstop like traditional monetary systems to address crises or protocol mistakes.
In particular, the code of Bitcoin has been regularly changed in the past to prevent bugs and enhance functionality.
But emerging risks, such as quantum computing, cast doubt on the cryptographic security of Bitcoin in the long term.
Dalio pointed out that these are actual challenges to mainstreaming Bitcoin as money due to these technical uncertainties.
Bitcoin’s Privacy Problem Behind Dalio’s Skepticism
The transparency of Bitcoin is also a two-sided sword, as pointed out in the critique by Dalio. Although most applaud the open ledger due to its security and anti-corruption, Dalio insists that this renders Bitcoin inappropriate to large financial institutions and governments that need privacy in their transactions.
The popularity of Bitcoin as an alternative to reserve-level sovereign currencies is counterintuitive to the visibility of the funds and flows on the blockchain.
The cautious optimism of Dalio is the current trend in the crypto world involving the supporters of the blockchain and the fiscal conventionalists.
His opinion appreciates the supply avenue of Bitcoin and the universal transactional advantages, but identifies the exposure of potential critical vulnerabilities that can impede its institutional adoption.
The post Bitcoin News: Dalio Uncovers Bitcoin’s Biggest Threat, Its Code appeared first on Live Bitcoin News.