Are you still a sceptic? One big-name Australian venture capitalist presented the reasons why digital money will conquer all.
The post Here’s why cryptocurrencies could take over the world: expert appeared first on The Motley Fool Australia. –
With the ASX’s first cryptocurrency-themed exchange-traded fund (ETF) listing on Thursday, digital tokens have broken through a new barrier for mainstream acceptance.
But one prominent venture capitalist has declared his faith that cryptocurrencies will eventually take over the world.
‘Rorting by the powerful’: The injustices of the SWIFT network
According to MH Carnegie founding partner Mark Carnegie, the traditional global money transfer system SWIFT moves around $140 trillion each year.
And he reckons the institutions that run the SWIFT network charge extortionate fees as an international monopoly.
“It’s essentially a casino that is completely rigged by the incumbent banks and the central banks of the world to leg over consumers everywhere,” he told Switzer TV Investing.
“This is purely and simply rorting by the powerful.”
Moving money from A to B in the era of electronics should not cost as much — or take as long — as the SWIFT network does, according to Carnegie.
“If you’re trying to send money to your cousin or your aunt in another country, the money leaves your bank account, [then] arrives somewhere else 3 days later,” he said.
“You get charged fees you don’t understand for reasons which you can’t understand.”
And for many decades, you had no other choice.
But in the past 10 years or so, cryptocurrencies were developed to resolve exactly this injustice.
“Crypto said ‘that’s absolutely ridiculous’. There’s just a couple of entries in a computer file — costs you virtually nothing to do it,” Carnegie said.
“We can attack the [$140] trillion and do it for a fraction of the cost.”
Cryptocurrencies aren’t about those living a comfortable middle-class life
Carnegie pointed out that for the majority of people in developed nations, the choice between SWIFT and cryptocurrencies might not mean much.
But for the billions living in less developed countries priced out of traditional banking, cryptocurrencies could be “life changing”.
“For me, crypto moves from the outside in. It moves from the marginal economies of the world to the mainstream,” said Carnegie.
“I don’t think, given how efficient it is, it’s stoppable at this point… The run is on.”
Authoritarian states, like China, can try to ban cryptocurrencies to crack down on financial transactions they don’t have oversight on.
But it doesn’t matter, said Carnegie.
“Truth be told… all the miners have moved to different countries. All the guys who understand this area have moved to Singapore.”
‘The world was willing to turn upside down for 30,000 really rich people’
For Carnegie, the global financial crisis 13 years ago really brought home how, ultimately, the regulators are perversely controlled by the giant finance institutions.
“There’s a phrase out there called ‘regulatory capture’ which is when the regulators get captured by the industry,” he said.
“What you saw in the 2008 GFC was that the world was willing to turn upside down for 30,000 really rich people at the same time as they weren’t willing to do anything about climate [change].”
And this triggered the rage the founders of cryptocurrencies felt in creating money that wasn’t controlled by central authorities.
“They just said: ‘This is rigged for the rich and we’re not going to cop it anymore’.”
Now there are 3 camps fighting for future supremacy, according to Carnegie.
“There are the people around Ethereum, with this guy Vitalik Buterin. There’s 2 brothers who run a business called Stripe out of San Francisco… And there’s the incumbent banking system.”
He knows which horse he’d be backing.
“You have 2 people who could be odds-on favourites for the Cox Plate, and one horse with 3 legs,” he said.
“Unfortunately, the incumbent bankers have not a chance in this fight.”
Carnegie has literally bet on the race, with his venture capital funds invested in a business named Crypto Gaming United.
That business is a cryptocurrency play-to-earn platform with the majority of its gamers based in the Philippines, according to Bloomberg.
The post Here’s why cryptocurrencies could take over the world: expert appeared first on The Motley Fool Australia.
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Motley Fool contributor Tony Yoo owns shares of Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.