Experts see bitcoin as future currency, safer option
As payment systems worldwide continue to undergo transformation and upgrade, cryptocurrency, Bitcoin, has been identified as the currency of the future that will change the way people manage their finances.
According to Co-founder and Chief Executive Officer of Paxful, Ray Youssef, who spoke to The Guardian, Bitcoin is more traceable, trackable, and less anonymous than cash, as well as a safer option for Nigerians to embrace for the transaction.
He said: “Cryptocurrency is far less volatile compared to the fiat currency of some countries that experience high inflation on a periodic basis, driving market uncertainty, which is inimical to progress.
“African markets, by their very nature, are in great need of the financial fluidity that cryptocurrencies, particularly Bitcoin have to offer. It has the possibility to transform Africa’s economy.”
Youssef noted that contrary to conspiracy theory on the origin and identity of the creators of Bitcoin, the truth remains that it was the brainchild of a mysterious, unknown person or a group known as “Satoshi Nakamoto.”
Also, he said contrary to erroneous beliefs in certain quarters, the currency can actually be used to purchase anything as long as it is accepted by the seller.
“Bitcoin is a currency used by millions of people everywhere, thus making entry to the global economy more accessible,” he said.
Youssef said while most people believed bitcoin is a decentralized currency many others argue otherwise.
“This is because four mining entities control more than 50 percent of the hash rate. Regardless of whether or not you believe bitcoin to be a decentralized currency, it has unquestionably been built on a distributed system.”
“You might hear that bitcoin is a hoax, that it has no intrinsic value, and is not backed by the dollar or by precious metal. How about our government-issued paper money? What’s backing our fiat currencies apart from a central bank that has complete control over how much money they can print?
“With fiat currencies, governments can print an infinite amount and inflate the value, which decreases our purchasing power and can even lead to over a
100, 000 per cent hyperinflation, similar to what happened in Venezuela.
“Money has value simply because we believe it has value. It could be shocking for people to discover that in the case of bitcoin, it has value because it has been defined as both a type of commodity and a type of currency.
“While it can be used to make purchases, government jurisdictions such as the Internal Revenue Service may also treat it as a property, which may make it taxable,” he said.
Youssef pointed out that bitcoin said at the moment, billions of dollars of investment ride on bitcoin stressing that what adds to the value of bitcoin is that there is a finite and limited supply of 21 million bitcoins.
He debunked insinuations that bitcoin is a scam saying the currency is not a company and is not owned by anyone. Rather it is open, decentralized and borderless.
“It’s unfair and illogical to blame bitcoin for the existence of pyramid schemes. If you understand the technology behind it and how it works, you’ll know that bitcoin has no pyramid structure.
“A lot of Nigerians who fell victim to the popular Ponzi scheme “MMM” were advised to invest in bitcoin, as many people were converting their cash into bitcoin during that time.
“These people invested in the Ponzi scheme with high hopes of exorbitant returns. However, the capital invested was lost and so was the return on investment.
“As a result, the victims readily took to social media calling bitcoin a scam, when what really happened was that the MMM platform exploited bitcoin for their planned exit scam. Bitcoin was not, is not, and will never be a scam.”
Quoting crime historian, Jérôme Blanchart, Youssef said criminals are usually the early adopters of emerging technologies.
“For example, cars were first used by bank robbers as a means of escape, while police, chased robbers on bicycles or horseback.
“As bitcoin gained a significant boost in popularity, criminals have abandoned bitcoin for another currency. A report suggested that at present, less than one percent of bitcoin transactions are related to illegal activities.
“Interestingly, and perhaps not surprisingly, there are a lot more activities, both legal and illegal, that are conducted with fiat currencies,” he added.