On October 11, 2018, two prominent figures spoke in front of the Senate Banking Committee to talk about cryptocurrency and how the future of both society and the digital currency will be intertwined.
Two Sides of the Same Digital Coin – Crypto Rears its Head
Spearheading the offense was potential 2020 democratic candidate Elizabeth Warren, who, as Forbes called it, “took two major swipes at cryptocurrency today.” Taking charge in favor of Bitcoin and the like was director of research for Coin Center Peter Van Valkenburgh.
Concerned views about cryptocurrency as a whole seemed to stem from those worried about consumers participating in ICO’s as a way to make returns not seen in the stock market.
In an unregulated industry with little to no protection for the individual, this had not only Warren worried, stating that “the challenge is how to nurture production aspects of crypto with protecting consumers,” but also alarmed Ohio Senator Sherrod Brown as well.
As an important side note, Brown will take control of Banking Committee as chair if the democratic party take control of the Senate during next months elections.
Not only is there very little currently in place regarding legal or financial protection, but if a hacker or something occurs to the ICO that results in loss of funds, there typically is no recourse for users.
Despite these pitfalls, Brown has expressed his opinion that crypto and blockchain will help innovate current financial services and introduce them to the unbanked but says real-world applications are still few, and the number of hacks, scams, and other issues are still too many.
While the opposition doesn’t deny these claims, they chose to focus on the marvels Bitcoin has achieved, and attributed the setbacks as growing pains.
On the other hand: Revolutionary
In its defense, Valkenburgh related the rise of Bitcoin to email in its infancy back in 1972; the now commonplace communication standard had many kinks to work out in the beginning as well. However, since then, email has transformed how we communicate across borders and time zones. The same advantages are not lost on the use of cryptocurrencies in finance.
Bitcoin provides a singular public infrastructure for sending payments and can replace many other private systems. Having central points of failure leads to many suffering, as Valkenburgh points out with the Equifax hack that exposed roughly half of all Americans (143 Million) Social Security Numbers.
SWIFT, what’s currently the de facto standard for bank transfers across countries, has relayed millions of dollars in fraudulent transactions thanks to hacked banks, the largest of which is North Korea the FBI suspects. The banking network is also responsible for the most extensive electronic robbery accounting for $1.8 billion when corrupt employees at Indian bank Punjab National Bank fraudulently certified SWIFT messages.
Either way the Committee swings, they’ll have a lot to consider to address concerns of the Warren while not stunting the growth Valkenburgh and many others believe cryptocurrencies possess.