Vitalik Buterin: Digitalization is Inevitable and Privacy is King
With governments falling over themselves to be the first to launch a Central Bank Digital Currencies (CBDC), many in the crypto space fear the future of cryptocurrencies.
Not so Ethereum co-founder, Vitalik Buterin, who, in a recent interview, said digitialization of everything was inevitable, and that privacy coins would be more favourable than government deployed shitcoins.
Digitalization is Inevitable and Privacy is King
Vitalik claims that decentralization is key to any currency being a success in the future. He said people would gravitate towards decentralized cryptocurrencies rather than sovereign and corporate controlled shitcoins, as people were fed up with centralized power.
‘The main challenge with central bank and even corporate currency is basically the concentration of power, the concentration of data collection,’ said Vitalik.
And the Ethereum co-founder even hinted at his fear of an authoritarian-type control system with a centralized digital currency world, as CBCDs would give governments much more control than they have now.
Buterin explained his fears of government controlled digital currencies, saying, ‘We have seen many situations in which even things that are completely legal simply become limited because whoever manages centralized checkpoints simply wants to exclude a certain category of users and I think these are the reasons why people will still be interested in fully decentralized digital currencies.’
Governments Challenge Decentralized Currencies With CBDC
With cryptocurrencies growing in popularity, and coroporate coins, sucha s Facebook’s Libra coin becoming a reality, governments have no other option but to release their version. And according to a study by the Bank of International Settlements, up to a third of all governments are actively creating their own CBDC.
China’s digital Yuan is believed to be furthest along, and it’s expected that any nation that can release their CBDC first will gain a huge advantage in international trade. The U.S. isn’t far behind and it can be understood that the race is firmly on.
Not all central banks are convinced with the impact or necessity of a CBDC. According to former CFTC chair J. Christopher Giancarlo, ‘many central banks around the world remain skeptical about the CBDC, and that the further impact of such digital currencies on the central bank’s national financial system and national economy is still uncertain.’
Bitcoin has opened a whole new Pandora’s Box. With its growth in popularity and understanding we have seen a whole new asset class develop. These platform, privacy and utility coins have made governments take notice.
The digitalization of everything is inevitable. Everything will have a digital representation. It remains to be seen, however, if people will put as much trust in government and corporate controlled digital currencies than decentralized and immutable networks based on trust.
Author: Tommy Limpitlaw