Cryptocurrency has become a global sensation in recent years, but there is still a lot to learn about this rapidly evolving technology. Many people are distressed about the technology’s potential to distort existing banking structures.
Professor Joseph A. Grundfest of Stanford Law School has explained how cryptocurrencies are being used, where mistakes have been made, and where this technology’s future lies. As a former commissioner of the Securities and Exchange Commission and a financial systems scholar, Professor Grundfest is uniquely qualified to speak on the future of bitcoin.
Cryptocurrencies: Are They a Trustless System?
Cryptocurrency critics contend that because they are not linked to any government, nation-state, or other entity, they are inherently untrustworthy. They may argue that crypto is superior to traditional fiat currencies since it is not dependent on the US federal government, for example.
Whether you think it’s a positive or negative thing, Grundfest points out that it’s not entirely accurate. Cryptocurrencies aren’t completely unreliable. They are still reliant on the blockchain technology that underpins cryptocurrencies like Bitcoin, which is mostly located in China. The Chinese government might potentially make big changes to cryptocurrencies by forcing its will on data miners who maintain their operations.
Furthermore, safe crypto casinos have allowed gamblers to use popular cryptocurrencies to play their favorite online games. Crypto casinos, according to industry insiders, are the future of online gambling as their popularity grows.
The impact of Libra on the Cryptocurrency World
Libra, Facebook’s entry into the cryptocurrency world, has been hailed as the answer to a litany of financial ills in some areas. The platform was designed with international payments and the reduction of unnecessary transaction fees and taxes in mind.
Professor Grundfest acknowledges that the goal is admirable, but he believes the technique is flawed. He does not feel that adding another cryptocurrency to the mix is the best method to reduce payment transactions, and he opposes Facebook’s ambitions to entirely bypass conventional financial systems.
Professor Grundfest believes that establishing Facebook’s own bank, which would act as the primary banking institution for its consumers, would have been a better plan. The company might have focused on establishing banking systems that were suited to each country or region, as well as meeting regulatory requirements and minimizing expenses.
Is Stablecoins the Crypto Market’s Future?
Stable currencies have become increasingly popular as a way to back crypto with real-world assets, similar to how the US currency was previously backed by gold. As assets, other currencies, commodities, or almost anything else virtual could be utilized.
Grundfest points out a few flaws in this technique. It effectively recreates an existing system, for starters. Another concern is that it will be simpler for people to commit fraud because it is not as straightforward to audit and control as traditional currencies.
Professor Grundfest concluded the webinar by exploring some of bitcoin’s more potent applications. People in countries with weak currencies, for example, maybe better off investing in Bitcoin instead of local equities.
Cryptocurrency’s future is still uncertain. Critics only see danger, whilst fans only see limitless possibilities. Professor Grundfest is a skeptic, but he acknowledges that cryptocurrencies may be useful in some cases.