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INTERVIEW BEYOND20


‘Bitcoin isasolution toavery real problem’


THE MORE ITS VALUE RISES, THE MORE ECONOMIC INCENTIVE THERE WILL BE FOR ENERGY PRODUCERS TO AUGMENT OR REPLACE THEIR GRIDS WITH RENEWABLE ENERGY SOURCES, SAYS BITFURY’S VALERY VAVILOV


than $40,000 in January before receeding to about $35,000. Growing pools of institutional money are gaining exposure to bitcoin, and even some corporates have started to allocate part of their cash reserves to bitcoin. Bitcoin miners, who support the whole network, have been as busy as ever, including London-based Bitfury. With proprietary mining centres in Georgia, Norway and Canada, Bitfury is one of theworld’s biggest bitcoin miners and blockchain compa- nies. Founder and CEO, Latvian-born Valery Vavilov, discusses the ongoing shift in the mar- ket, withminersmovingoutofChinaandfavour- ing alternative locations for their stability, but also the availability of renewable energy sources.


B


potential down the road. We are seeing some uptake in the international trade space and very early innovation in the international investment space. Bitcoin and blockchain can have transfor- mationalimpactonbothinternational tradeand investments as the current structures are very complicated and riddled with bureaucracy, which will ultimately drive the need for trade transparency. Bitcoin and blockchain have the potential to add trust to every transaction and level of trading,andasaresultsimplify tradepro- cesses, workflows and exchanges, making them more efficient, less costly andmuchfaster.


Q A


Q A


: What use cases do you envision for bit- coin?


: The immediate and most potent use case for bitcoin is its store of value. Mark Cuban


did not get this right a fewyears back: bitcoin is not “more religion”, it is a solution to a very real problem. Theworld is backed by gold today, and gold is not very user-friendly, not any more any- way, as the world becomes flatter and as central currencies become increasingly unwieldy. Bitcoin shares a lot of gold’s attributes to become the potential global standard for store of value. Here’swhy. First off, it is limited in sup- ply – there are 21 million bitcoins and this amount is not going to change. This means bit-


48


: How can bitcoin facilitate international trade and investment?


: The use of Bitcoin for international trade and investment is in its infancy but has big


itcoin has once again captured the atten- tion of the public by staging another one of its lightning rallies, surging to more


coin is shielded from inflation compared with other currency options. It is very secure and is backed by tremendous computational power. It is logic- or algorithm-based, which enables its transactional value. And it is fully transparent: you can track any bitcoin transaction in real time. All of these characteristicsmake it a prime candidate for transforming not only global tradeandinvestments, but global payments too. This means bitcoin can give rise to new pay-


ment instruments. Even though the currency is volatile, there isnoreal other global alternative, especially for the unbanked,whorepresent 31% of the global population per the Global Index database, with 55 million in the US alone, per Federal Reserve estimates. Bitcoinhas thepoten- tial to democratise access to financial systems around the world. Such access doesn’t exist today.Imagine the potentialwheneveryone has access to such systems and when the world becomes a flatter place for all: individuals, start- ups and innovative businesses. It can be truly game-changing and this prediction is no longer far-fetched and can no longer be pegged simply as a religion without practical application. Last but definitely not least, bitcoin can


increase trust in institutions globally, and lead to the persistent reduction of financial crime from money-laundering to double dipping, which is pervasive across industries, and espe- cially in international trade, estimated to be worth between $800bn to $2tn every year.


Q A


: The head of the ECB, Christine Lagarde, and the former head of the Fed, Janet


Yellen, have recently stated the opposite, claiming that bitcoin actually channels illicit money flows.What do yousee that they can’t?


: Illicit money flows, including money-laun- dering activity, is a global systemic issue and


bitcoin is not immune to it. However, bitcoin transactions are by their nature fully open and transparent: this is the strength of the bitcoin blockchain over other systems. Every operation, every transaction that takes place in it leaves a trace, which can not be hidden, changed or erased. This is the fundamental basis of block- chain. Onthe other hand, the existing banking and


centralised payment systems do have the possi- bility to conceal all traces of fraudulent transac- tions: they can be dismissed fromthe system, or


www.fDiIntelligence.com February/March 2021


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