Well-known Software Engineer Jameson Lopp believes that cryptocurrencies are placing power back in the hands of people - who have trusted banks and financial institutions to be responsible with their money, investments and transactions for far too long.
One only needs to look at mainstream media headlines as Bitcoin price continues to soar after a month long bull run.
Heads of traditional financial institutions and banks have hit out at Bitcoin and other cryptocurrencies as they fight to keep hold of the status quo. Countries like China have gone as far as banning the use of cryptocurrencies.
But as the current Bitcoin price would suggest, more and more people are putting their faith and money in cryptocurrencies as a superior transactional technology.
Bitcoin turns banking on its head
Speaking to Max Keiser, host of RT’s Keiser Report, Lopp believes that the successful development of Bitcoin has turned conventional thinking about banking and money on its head:
“At least from the monetary standpoint, we said let's turn this whole thing upside down. Instead of us trusting certain entities, instead we are going to track everything ourselves, validate our rules and not trust anybody.”
“We will create protocols and use the technology developed over the last generation in order to automate our communication and trust with each other.”
Since its inception in 2009, Bitcoin has slowly crept its way into mainstream consciousness and has risen to the fore in the second half of 2017. So much so that institutional investors are lining up to get in on the action, with their entry point the launch of Bitcoin futures on the CBOE and CME.
It wasn’t always that way, as self-proclaimed cypherpunk Lopp reminds us that the development of cryptocurrencies has followed an incredible journey of trial and error over the past 30 years.
“The origin of the cypherpunk goes back to the 1980s. A bunch of nerds who saw the promise of the internet and these new communication technologies but they also saw the dark side.”
These cyber revolutionaries predicted the future threat of surveillance agencies and began developing technology that ensured private communication, which has culminated in encrypted peer-to-peer communication technology and eventually Blockchain. Lopp continues:
“They wanted to bring privacy-enhancing technologies into the internet itself, on top of the internet protocols and it just so happens that digital money was one of those interesting things the cypherpunks thought was important for society to have. A number of cypherpunks worked on it for decades and it wasn’t until 2009 that Satoshi came along with an elegant solution.”
“There were many, many attempts and failed solutions that happened before Bitcoin.”
Fast-forward eight years and Bitcoin remains the father of cryptocurrencies - but it is undoubtedly entering uncharted waters with the introduction of futures and other Wall Street trading practices.
Lopp doesn’t entertain the notion that futures will cause Bitcoin to crash - saying anyone who tries to do that will not get very far:
“There are some people that think it's going to short Bitcoin into the ground. I think a more likely outcome is that shorting Bitcoin is a terrible idea and anyone who tries to do that is going wrecked pretty hard.”
It’s going to be another interesting month for cryptocurrencies in general, as everyone waits to see how Bitcoin will react to the introduction of futures.
Lopp, on the other hand, has his eyes on a different horizon. The very fact that Bitcoin’s value is referred to using fiat currencies shows that there is some way to go before it becomes a heavyweight in the world economy.
Lopp says the end goal is for Bitcoin to be a unit of measurement for other currencies.
“This is just a transitional period. We’re still using the dollar as the unit of account. We’re trying to get to the point where we’re using Bitcoin as the unit of account. I think it’s going to be a few more years until we get to that point of hyperbitcoinization that some people are dreaming about.”