Creator of McAfee software offers thoughts on cryptocurrency
Some, like bitcoin, differ from normal fiat currencies, or currencies backed by a government but without physical tender, because they are deflationary. This means that they become more valuable over time because of their finite supplies.
They also have no physical component as they are solely digital. With cryptocurrency being a relatively new concept, concerns over possible scams within the industry and a lack of trust in it have many investors concerned.
As cryptocurrencies become more prominent in the economy, banks are adapting. Firms like Goldman Sachs Group Inc. have created a cryptocurrency trading desk in order to capture some of the value of this market.
“So, banks are trying to survive by keeping the structure, the culture, the format and the conflict that they have had for hundreds of years and simply adding crypto to it. That’s kind of like a person dying from cancer selling [themselves] life insurance, it is meaningless and a charade, or if not a charade it really shows the shallow knowledge that banks and other institutions have over truth of crypto and the truth of the block chain,” McAfee said in response to a question regarding big banks moving toward implementing more cryptocurrency trading platforms.
Cryptocurrency is challenging the foundation of banks because it is a decentralized currency and doesn’t have one consolidated producer, like most fiat currencies. Banks offering services related to cryptocurrency therefore undermine their own business structures. Banks operate under traditional financial institutions, so by integrating cryptocurrency they are bringing themselves competition and promoting it, ultimately contradicting themselves, McAfee said.
With blockchain technology, the role of banks is diminished because blockchain is a digital ledger that is overseen and validated by the entire community of a specific cryptocurrency instead of just one institution such as the Federal Reserve or a bank. This is how the currency is decentralized and how the control of it is spread among its users.
All of these factors are why cryptocurrency may find its backing in millennials. According to McAfee, “90 percent of millennials do not trust banks.” With this lack of trust in banks, they may turn to cryptocurrency in order to secure their money. Most of the transactions through cryptocurrency are done without the use of a bank or financial institution.
During the event, McAfee answered many of the tough questions facing cryptocurrency. On the topic of possible government regulation, McAfee said, “It is foolishness to pass laws that you cannot enforce and trying to force us to use one cryptocurrency over another is foolish because it cannot and never will be enforced.”
Pointing at the flaws in any regulation of the use of cryptocurrency as a currency, McAfee said it was impossible to control because people would not follow the regulations or they would not be enforced.
“There are two types of laws — those you can enforce and those you can’t. It’s foolishness to pass laws you can’t enforce,” he said.
The Crypto Club was started this year with the intention of studying how cryptocurrency will play a role in the future of the economy.
“We have basically three goals, our first goal is to spread the knowledge and basically educate people on campus and anybody interested in joining us in the club about blockchain,” Fan Yang, vice president of the Crypto Club, said.
“Our second goal is to connect people in the space, we invite people from the space to come talk to us and network with us so if people have career aspirations in this space they can get connected with these people … and third goal is just to have fun, I mean, this is an innovative technology and there is a lot of creativity.”
The future of cryptocurrency, banks and what currency is relies heavily on the younger generations. Whether or not it will exist in the future does not matter as it is a prevalent force in the economy and is changing the entire idea of currency.