19 May Citi’s Tony McLaughlin on CBDCs, Libra and bitcoin
Tony McLaughlin of emerging payments and business development at Citi tells Finextra TV of his soft spot for bitcoin as an alternative investment, but points out the inefficiencies that still afflict the cryptocurrency.
Comparing bitcoin to central bank digital currencies (CBDCs) being developed in countries such as China and Sweden, with research and discussion ongoing in many others, McLaughlin draws attention to the proof-of-work model that the bitcoin blockchain is built on.
“CBDCs will not rely on proof of work. They will be quasi-centralised systems and not open to anonymous people running nodes,” he says.
McLaughlin says this would also be the case with private digital currencies like Libra.
The shortcoming of a proof-of-work blockchain is the substantial amount of energy required to power the computers used to solve the mathematical problems and win the right to add the next block to the ledger.
This makes mining a hugely expensive task and…