"It (bitcoin) is partly a medium of transaction, a medium of exchange," Google Chief Economist Hal Varian said.
A concept that came into existence in 2009, bitcoin has become very popular of late with its exchange rate surging past $1,000 per unit in November from a little more than $200.
"I think something like this technology will take hold in the future but I am not particularly optimistic about bitcoin because it suffers from being the first in the area.
"We have a saying in the US that you can always tell pioneers that they are the ones with errors in their bags," Varian said here.
He was interacting with the audience after giving a talk on 'The Information Economy in an Internet Age: New Paradigms for Competitiveness and Economic Growth'. The event was organised by economic policy think tank ICRIER.
Meanwhile, in a set back to the emergence of bitcoins, China has directed its banks and other financial institutions not to deal in it.
Besides, the United States has said that all prevailing money laundering laws would apply to bitcoins.
The Indian authorities might issue an advisory to warn against the potential risks associated with this new digital currency.