Media magnate Steve Forbes, chairman and editor-in-chief of Forbes, believes that cryptocurrency will help to stabilize the government-controlled financial system and urges technological development to continue.
The U.S. taking Japan route
Cryptocurrencies, Forbes noted, have emerged as a technologically-forward “cry for help” as governments turn to quantitative easing and free credit to revitalize their economies.
However, excessive printing causes long-term financial instability. Take Japan as an example; the government ran a Q.E. program in the late-1980s, leading to “The Lost Decade” from 1990-2000 — a period defined by decreasing economic output and inflation.
Japan has still not recovered fully, even thirty years after the Q.E. program. Critics say the U.S. is headed down a similar route if additional measures are not put in place.
While Bitcoin and the broader crypto market helps with the above, Forbes called out the massive volatility in BTC markets. In early-June, China’s former central bank voiced similar concerns, stating Bitcoin was a “commercial success” but its volatility meant the protocol was more of a speculative instrument than a serious currency alternative.
Hard cap a mistake
Bitcoin’s 21 million supply was also subject to scrutiny, Forbes noted restricting the supply to eventually create value was a mistake on the creator’s part. He explained that money is meant to facilitate commerce, not “control the economy” and impede businesses with scarcity.
Political impediment for Bitcoin
Forbes believes Bitcoin will not see widespread adoption without a political and regulatory struggle. In fact, he points out that cryptocurrencies could never receive permission to operate as widely they can.
His solution? Going ahead with development and project launches while dealing with the implications later on.
On the future of cryptocurrencies, Forbes said the market needs to become “extremely easy” for ensuring adoption beyond the use as a crisis currency. He added measures to control volatility need to be implemented.
The main problems of first generation cryptocurrencies, such as Bitcoin, is that they are hard to use for the general public, have very high volatility and are very demanding as to security measures. These are the main obstacles for wider use and adoption of Bitcoin and other first generation crypto. However there is already next generation of cryptocurrencies, trying to come up with solutions for that.