Patrick Young: Blockchain and cryptocurrencies are warming up
In 1999, no one could imagine that e-currency would become popular, and now this topic is just “gaining hold”. This is the opinion of a fintech pioneer, author of books on finance, cryptocurrencies and blockchain, Patrick Young. In the interview with Blockchain & Bitcoin Conference Malta, Mr. Young shared his views on the development of the crypto industry.
Patrick Young is a blockchain evangelist and pioneer of financial technology. He has been interested in these issues since 1994. He is one of the first to stressed the importance of cryptocurrency and blockchain.
Interviewer: Blockchain & Bitcoin Conference Malta (BCM)
Speaker: Patrick Young (PY)
BCM: Hello, Patrick. You call expansion of cryptocurrency usage a Copernican Revolution. Copernican theory once turned course of history on its head. Why you are sure cryptocurrencies will have such a huge impact on the world?
PY: My first book "Capital Market Revolution!" in 1999 outlined the importance of digital currency even before the significant development of blockchain by Satoshi into the arena. The Copernican revolution posits the move from the central bankers being at the epicentre of money to one where money (defined as a store of value) can be at the end of a distributed ledger thus reversing the physics of current economics.
I first deployed this title at Nicolas Copernicus University in Torun, the city of the great man's birth and it is appropriate as, after all, Copernicus himself had many specialities, most famously astronomy but also economics.
BCM: Bitcoin surpassed $7000 this year. Do you think bitcoin's price will rise again? Is there a risk of forming a real "bubble" in this context?
PY: I don't spend my days analysing the precise levels of Bitcoin. The importance is that the revolution is gaining hold and the underlying systems are being deployed. Bitcoin is but one currency in a crypto revolution – it is if you like the Model T Ford of the genre.
As to a bubble? Of course it is in a bubble of early adoptive excitement! Then again I would heed the words of economist John Maynard Keynes who pithily noted: "Markets can remain irrational for longer than you can remain solvent".
BCM: There is an opinion that the cryptocurrency revolution comes to its end, if not already completed. A number of arguments are cited in favor of this view, starting with a decrease in the effectiveness of mining to absence of protection for cryptocurrency users. What’s your opinion?
PY: When FT Prentice Hall published my book "Capital Market Revolution!" in 1999 many people saw no need for 'for profit' exchanges which used electronic dealers and not floors, they saw no need for ETFs when we had mutual funds, they certainly saw no likelihood that an electronic currency could become a mainstream thing (as the book also predicted).
That was 20 years ago. Things are barely warming up in the world of cryptocurrency and distributed ledgers.
BCM: Back to mining topic, the decline in its profitability has been a well-known fact for some time. What is the reason for this? Why is it getting harder to get bitcoins, while the cost of mining is growing?
PY: Mining is a technological arms race – these always are heavy on capital costs making it difficult to make the process viable.
BCM: How quickly will cryptocurrency world continue to expand? In your opinion, how long does it take for cryptocurrency to come into general use (like dollar or euro)?
PY: Fast and faster, albeit with a likely hiatus when the initial bubble bursts, thus emboldening the luddites while the progressives work on "Crypto2.0." See also the history of the World Wide Web.
BCM: Let's say that cryptocurrencies are already in daily use throughout the world. Will governments try to control it, and what is the probability that they will succeed?
PY: Governments have traditionally never seen anything they have not tried to control – which explains why many are currently under so acute financial duress as they have insufficient resources to maintain their micromangerial fixations! Expect political tantrums when the naked impotence of the blob in the face of digital dynamism continues to be exposed. Likewise expect to see brave (often small) states achieve vast wealth for all citizens from being in the forefront of permitting cryptocurrencies and blockchain technology.
BCM: And yet, in your opinion, is cryptocurrency the revolution or the evolution of the modern world?
PY: It is both.
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