Bitcoin has been around for more than a decade now. As compared to the age of our traditional financial system, 10 years are nothing to be precise. However, the impact that bitcoin has made in this time frame has been significant. It has already challenged the existing financial frameworks put in place by the governments and the banks. But being in its early age, bitcoin is faced with a lot of problems. Issues like manipulation, illegal activities, custody etc. make the general public question the credibility and worth of this digital asset. Uncertainty also revolves even now around its role in the financial market. While some say it is the digital gold, others are strongly of the view that it is more like a global digital currency.
In order to get a clear insight into the world of bitcoin, BlockPublisher recently got in touch with a well-renowned financial analyst, Mati Greenspan. Mati has been around in the financial space for quite some time and he was involved in paper trading just at the age of 12. Mati got involved with the world of bitcoin somewhere around 2013. The following Q&A gives one a crisp insight into what his opinions regarding the bitcoin world are overall.
- How would you explain bitcoin to a new person coming into this space?
Mati: “I would just say very simply that bitcoin is the world’s first international and global money that was designed to be independent of governments and banks.”
- Do you think Bitcoin is the digital gold or is it a digital currency?
Mati: “It does have aspects of digital gold. I believe that the term digital gold is a very good nickname for Bitcoin and I believe it is also a digital currency. We’re talking about something that’s absolutely new in the world and it can have more. So yes, it has that connotation of digital gold but it also has many other uses like digital currency.”
- Do you think it will replace fiat in the future somewhere?
Mati: “Maybe very far down the line. I don’t think that it’s necessary though the potential good of Bitcoin is even as something supportive of fiat currencies. So they can actually coexist. There’s been research done by the Federal Reserve Bank of St. Louis that showed that bitcoin coexisting with fiat actually serves to prop up the entire system because it’s independent, there’s no risk of contagion, which means that if something happens to the fiat currency then bitcoin will be there to hold it up.”
- The major connotation attached with Bitcoin is largely negative, why do you think is that?
Mati: “There is a good reason for this. Milton Friedman, an economist who won the Nobel Prize back in 1976, predicted Bitcoin in 1999. So Milton Friedman, in general, is someone who is a libertarian. He believes in less government intervention in our day-to-day lives. He was talking about the power of the internet and what he said was that very soon something will be invented where people can transfer money from one person to another without the need of an intermediary and when he went further he said look, this will have also a negative connotation that it can also be used for crime but eventually the potential good outweighs the potential bad.”
- Should the crypto market be regulated, if yes, to what extent should the governments get involved?
Mati: “No I don’t believe that there’s a rule of thumb. The trouble that regulators are having is that most financial assets start out very local. They start out in one market and then they grow to a global level. Bitcoin and all crypto assets are something that is global in nature. From the very beginning and now, regulators are trying to localize it. We don’t want to say that regulation is good or regulation is bad, but there is good regulation and there is bad regulation. Some countries are going to decide that they don’t want anything to do with digital assets and some countries are going to decide that they want to embrace them and be supportive of digital assets.”
Mati also seemed to be of the view that regulation is essentially good and positive for the ecosystem overall, but the regulatory bodies need to work hands in hands with the industry in order to make appropriate moves.
- Do you think the adoption of bitcoin will increase among the general public?
Mati: “You can’t force people to adopt something that they don’t want to but I believe that the people who are extremely anti over time, you know, they will see the benefits. But I believe that there are a lot more people that are kind of neutral and don’t necessarily know and the more they learn the more they’re going to understand the benefits.”
Still, a lot of issues remain with bitcoin as it is in its early stage of development right now. But the prospects and promises that it brings on the table in the form of a global digital currency framework seem to be game-changing. At the moment, it just seems to be the opening scene of “the bitcoin movie”, it will be interesting to see what happens next as we reach the climax…in case we haven’t crossed it already.