Bitcoin Can Serve As a Foreign Exchange International Platform: Larry Bates
Larry Christopher Bates of BitLand believes Bitcoin can serve as the best international platform for foreign exchange. In his opinion, an agnostic and interoperable monetary exchange platform is an example of where governments should be focusing their attention on Bitcoin.
Larry Christopher Bates of BitLand believes Bitcoin can serve as the best international platform for foreign exchange.
In his opinion, an agnostic and interoperable monetary exchange platform is an example of where governments should be focusing their attention on Bitcoin.
However, he thinks that it is not necessary for any government to give up control over its local currency. Ever so often, the Bitcoin community tends to rejoice when a country's currency starts tanking in hopes they will rush to Bitcoin as a haven. But Bates says that Bitcoin is not an appropriate haven due to its high rate of volatility by design.
The limits of Bitcoin
Bates says that trying to force Bitcoin as a panacea is hurting its cause.
“If the argument for Bitcoin as an agnostic forex was presented to governments to reduce their trade costs, reduce the need for tariffs and such, then it would be a much more viable option from a government's perspective. It is absolutely ridiculous to suggest to any government that they replace their currency with Bitcoin. Everyone in the community should stop making that suggestion to any country.”
Bigger than Blockchain
Concerning Blockchain technology, Bates notes that it is the most compelling and useful part of Bitcoin. For example, he notes that M-Pesa is a digital currency that does not use Blockchain, and has five times the amount of users as Bitcoin. He explains that the M-Pesa community has made a much bigger impact concerning how digital currency is used, however since they are SMS based and not Blockchain-based, the crypto community ignores M-Pesa, a development that Bates believes is a huge mistake.
“If we can disambiguate "Blockchain" vs "digital currency" and start to clear up the conversation, it is clear that both "digital currency" and "Blockchain" have their place in accelerating a paradigm shift which will see a more efficient global economy. Reducing the friction in transactions while simultaneously reducing the overhead associated with international transactions will no doubt have a great effect on the global economy.”
However, according to Bates, "altcoins", "Bitcoin", and "Blockchain technology" need to be disambiguated to make sure that governments take them seriously. Altcoins serve a purpose concerning representation of special interest groups.
He says that one could argue that "Disney Dollars" as a special interest currency model have clear benefits concerning giving discounts to customers, benefits to club members, and giving another revenue stream besides "stocks" to the Disney corporation. If legitimate businesses adopted the altcoin model, it would not only make companies like Starbucks have more efficient and effective reward systems, it would give the customer a way to trade out their currency for an altcoin to another business.
Round pegs in round holes
He also emphasizes that this is about using tools in the proper places. There are tokenized Blockchains, non-tokenized Blockchains, permissioned Blockchains, non-permissioned Blockchains, proof of work, proof of stake, ASIC mining hardware, Scrypt mining hardware and all kinds of algorithms beyond SHA-256. He explains that Bitcoin is effectively the "brick phone" of the mobile phone industry.
“If you saw someone using a brick phone in 2017, it would be absurd. To me, this is one of the reasons that it is illogical to hold on to Bitcoin as the technology that will persist, as although it is the flagship "cryptocurrency", concerning "digital currencies" M-Pesa is far out-performing Bitcoin in many ways.”
Bates concludes by saying that it is important that governments have digital currency specialists in addition to Blockchain specialists, so they do not conflate them from the start. As the two industries develop, they will become even more articulated and refined, and will need their own respective identities.