Bitcoin has entered the financial world with a huge storm. It has just been over a decade for this asset and debates regarding it replacing the traditional fiat currency framework have already been going on. But will it ever be able to do so with so many illegal and negative activities floating around in this space due to the lack of concrete regulatory framework?
The Vice President of Business Development Blockparty, a blockchain ticketing platform, Vladislav Ginzburg recently got in touch with BlockPublisher as he expressed his opinions regarding this nascent space. The following Q&A helps one grasp the narrative presented forward by Vladislav.
- Will bitcoin replace fiat or act as a reserve currency in the future?
Vladislav: “Bitcoin replacing sovereign fiat currency is not realistic. Nations have unique economies and therefore benefit from having their own monetary policy and legal tender. Bitcoin is unique from other currencies in that it is independent of any particular sovereign nation or jurisdiction, operates on predictable and autonomous governance, and is transparent to all parties who participate in the network. These features make Bitcoin resistant to political influence, creating an attractive alternative to sovereign fiat currency as a global reserve currency. This is the future that I think is more likely for Bitcoin.”
- Is it digital gold?
Vladislav: “Describing Bitcoin as digital gold is an oversimplification of the features and capabilities that its blockchain is capable of. But perhaps that’s a positive; it makes the Bitcoin concept more accessible to a greater audience of people who are unfamiliar with distributed ledger technology but understand the gold concept as it relates to a globally accepted store of value.”
- Should this market be regulated?
Vladislav: “Bitcoin markets should be regulated only in the sense that wallets should be subject to Know Your Client and Anti Money Laundering checks. Bitcoin is autonomously governed by preprogrammed algorithms and policy, so what other regulation would make sense? As Bitcoin is not tied to any particular jurisdiction, what regulatory body would be able to enact policy upon it?”
- What can governments do to curb out the negative elements linked with bitcoin?
Vladislav: “There are actually no negative elements inherent to Bitcoin as far as Governments are concerned, only negative actors that have used Bitcoin for illicit activity. It is precisely the same elements of Bitcoin that made it an attractive currency for illicit activity in its early days that should make it attractive to governments; namely the audibility and immutability of each transaction of value from one wallet to another. If each wallet was associated with an ID, “hiding” or “laundering” money would be quite impossible.”
The future of bitcoin seems to be too unclear as of now. Nothing can be said for sure in this volatile space. The only thing that seems certain about this digital asset is uncertainty. Also, bitcoin’s role in the financial world is not clearly defined as of yet. Will it become the digital gold or will it become a global reserve currency? Much cannot be said. Although it will be interesting to see what happens as we move forward into the future with developments being made at a very rapid pace. Things are just getting heated up.