People have a poor understanding of what Bitcoin is, and little knowledge of how the world’s financial system and economy functions. It can’t necessarily solve the current economic crisis or other existing problems by itself. That’s according to Dr. Craig Wright in an ask-me-anything session streamed as part of the Breakthrough Conference from his home in London on April 1.
The 24-hour Breakthrough conference was presented by entrepreneur hostel network Draper Startup House. In keeping with these self-isolating times, it was a virtual conference live-streamed from its guests’ private homes in locations across Asia, Europe, and the Americas.
Moderating the session was Faiacorp Director George Samuels, who took questions from the audience via Periscope. Given the nature of the conference and current socio-economic conditions worldwide, many of the questions concerned how Bitcoin could come to the rescue.
George S. Samuels (@siosism) interviewing Craig S. Wright
— $savagewolf (@savagewolf31) April 1, 2020
The kicker? It can’t—at least, not by itself. Rebooting the world economy after its self-inflicted demolition will still be up to people, using both new and existing tools.
Dr. Wright generally explained Bitcoin itself is just infrastructure and doesn’t have an inherent ability to solve the world’s problems. What’s important is how people use Bitcoin and what systems they choose to build on it.
It’s similar to the internet itself—a powerful technology that has changed the world. Still, those changes didn’t come from the protocols or hardware; they evolved from ideas and services developed by smart and visionary people who created practical applications.
Response to pandemic ‘asinine and stupid’ and will hit the poor hardest
Dr. Wright indicated he’s no fan of the measures governments have adopted to combat the COVID19 pandemic, calling it “completely and utterly asinine and stupid.” Bringing the global economy to a creaking halt has taken a manageable situation and “turned it into something almost fatal” that would impact the world’s poorest people first—and hardest.
“No-one’s reporting the fact that more people are dropping dead in India from starvation than (the virus) will ever cause over there,” he said.
His biggest worry is the lack of freedom these controls and restraints bring will continue long after any threat to public health has subsided, he added. No matter what emergency has occurred, tyrannical governments have always used them to seize more control and never give up the new powers they acquire.
So people shouldn’t expect Bitcoin to have any magical powers to reboot the world economy. In fact, Dr. Wright himself asked: “How do you go about rebooting everything after this?”
He cautioned the world would face economic problems both during and after the COVID19 panic. However, those problems would arise more from a lack of production than from the monetary policies central banks were adopting, like “printing” on a massive scale.
When asked what “true wealth” meant to him, he said that wealth is goods and services created by the economy, not the amount of money or tokens owned.
“For some reason, we’ve gone into a level of production equivalent to the Dark Ages,” he said. Some fear excessive money printing and distribution would end in uncontrollable inflation, but the problem is more that goods themselves will become scarce.
“We’re going to have some huge problems over the coming month because we’re not producing. And that’s going to have flow-on effects.”
At the end of the crisis, money will be plentiful, but goods to buy with it all will be scarce—and those are the conditions that lead to dangerous inflation. It will be the prevention of economic productivity, rather than excess money, which will cause inflation.
A technology like Bitcoin will not solve the production problem. Contrary to common belief, Bitcoin does not “bank the unbanked” or replace banking, central banks, or fiat currency systems. Like the production problem, the world’s poor suffered more from a lack of opportunity than from the technology to exchange.
That said, people can build on Bitcoin in a way that makes funding easier, perhaps via business loans and by finding new savings and efficiencies. Otherwise, Bitcoin as money was merely digital cash and “primarily a micropayments system” that facilitated fast and cheap transactions—something the current internet has failed to do.
‘Silicon Valley has become an absolute cesspit’
Other questions included what “the toppling of BTC would look like,” which Dr. Wright declined to answer. He preferred to talk more about Bitcoin’s purpose and the importance of understanding its capabilities and limitations.
Even the current inhabitants of Silicon Valley misunderstood both its finance and technology’s purpose, Wright said: The Valley “has become an absolute cesspit,” ruled by groups with a socialist and anti-capitalist agenda that repeated the false mantra of free, ad-based economies that won’t enrich anyone other than those at the top.
Stop speculating, he told those concerned about Bitcoin’s price volatility. Treat Bitcoin as digital cash and find uses for micropayments. No other blockchain has solved micropayment/digital cash problems properly, and neither has tech giants like Facebook and Google, despite years of trying.
The barrier to economic growth is people’s lack of understanding. It’s become a common theme in Dr. Wright’s presentations, but knowing more about how economies work and how technology can be put to better use is fundamental to changing the world for the better.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.