Crypto Adoption Debate – With John McAfee, Craig Neil, Chris Painter and Derek Capo
As you can tell from the line-up, while all are respected community members, John McAfee is the headliner and the one who can bring a crowd and raise a storm when its his turn to talk. While this is John's third interview in the past week (you can read the other two interview recaps here and here), this one packed plenty of fireworks and is worth listening to in full.
For those short on time, here are the key takeaways worth consuming, digesting and processing of the entertaining back and forth 1 hour and 15 minute interview!
Early on in the conversation, the entire panel seemed to agree with the notion that cryptocurrency trading and the growing obsession with trying to profit from the crypto markets high volatility, has stolen focus away from engaging in real-world use cases of blockchain technology and promoting them to the rest of the world.
“99.99% of transactions are not used for the real world, they’re used for trading and speculation,” said Derek Capo, CEO of TokenPay.
There are vast numbers of innovative blockchain-based projects on the market already solving mainstream world problems, but nobody seems to be interested in using these new platforms to replace their existing centralized counterparts because of the pull of the remunerative trading market. The blockchain’s capacity to enhance human life, he argued, was being overlooked for the short-term gains to be made from using tokens to speculate.
The current collective hysteria around crypto tokens and trading are damaging the image of blockchain technology to potential outside adopters, who are only hearing about the hacks, the scams and the money that people lose daily.
Chris Painter, CEO of Omnitude said that the need to steer away from this aspect of the industry and refocus on making blockchain appealing to the mainstream, by exhibiting the advantages of this new technology in real-world applications.
McAfee argued that shticks like CryptoKitties were a suitable way to encourage the broader adoption of crypto because they got people used to using it. For many users, CryptoKitties or similar obsessive trends were the first points of contact for sing cryptos. Studies have shown that after the first exposure at least 65% of people explore the venture further.
However, Capo disagreed here saying that Cryptokitties is not going to increase adoption of Ethereum. He went on to say that the trading nature of CryptoKittens still caves into the trading and holding for monetary benefits which most people are already doing. He warns that his biggest concern is that this attitude will lead to a permanent crash.
Host Wareing throws this question to the panel. Does it start with the consumer, does it start with enterprise or does it start with the government?
Chris Painter, the CEO of Omnitude has already worked with the Maltese government to implement blockchain into the public transport system. These kinds of use cases help in real-world adoption.
McAfee points out that cryptos and governments are at odds with each other. Take the problem of income tax for example. As more and more people adopt privacy coins it will not only be hard but in many cases impossible to track incomes of a user. Governments will have no idea about the flow of value. Either crypto will become centralized and means of control for the government or they lose track of cash flow in their respective nations.
The panel later points out that government even now can implement public ledgers that show where and how the funds are going. But, no one in government would want to open themselves up to scrutiny.
In order for governments have to allow decentralized systems, we will need our banks gone. However, right now, we still need them and the traditional financial system.
All of the panels seemed to agree with the opinion that the Proof of Work method is easier for a layman to understand whereas the algorithm behind Proof of Stake is esoteric and requires a technical genius to understand. However, Proof of Stake is energy efficient when on the other hand proof of work is an energy consuming goliath. It doesn’t make sense to be utilizing energy as much as the country of Denmark just to validate transactions.
Chris thinks that media has blown the whole energy consumption through mining out of proportion especially when you compare it to traditional banking practices. But we still need to find better ways to generate electricity and more efficient mining equipment to make this venture sustainable.
Capo thinks that the arrival of Bakkt will be a double-edged sword. They will certainly kill tons of crypto exchanges. They have got lots of traditional financial institute support. It might be scary if they win as we might be witnessing MSN being killed by Google where MSN is Bitcoins. They will come in, help with facilitation, however, they might kill the original pioneers in the process.
Although, McAfee feels that centralized exchanges are cancer to the current crypto ecosystem and needs to be replaced. Decentralised exchanges in their current form are in no way close to competing technically with centralized ones.
For those who want to watch it in full, here is the full interview: