At a time when central banks and other heavyweights in the traditional finance sector are busily stating reasons why bitcoin and the entire cryptocurrency ecosystem can’t function as fiat money, highly reputable serial entrepreneur Jeffrey Wernick has come up with ideas why he thinks the world’s legacy finance system is faulty.
Central Banks Are not Accountable
In an interview with Business Insider on July 11, 2018, one of the premier investors in cryptocurrency, Wernick has described the “people-oriented” structure of cryptocurrency as optimal in comparison to traditional markets. Specifically, the entrepreneur is referring to the decentralized system which affords people equal access to operate under unanimously consented guidelines as a key reason why it’s ahead of the fiat money structure.
Wernick who is equally a foundation stakeholder in Uber and Airbnb said the incentivized production of the digital currency exudes the quality of being neither forgeable nor vulnerable to double spending challenges, hence enjoying a distribution channel that is uncontrolled by any central authority. He declared his sentiments in the following:
“So it’s a people’s currency, it’s defined by the people, and it’s defined by rules and a protocol that people trust. So it’s not like somebody says, if I need to have economic growth, I’m going to give this institution money, and they’re going to transmit it to a certain universe of people.”
In the legacy finance world, especially in developing countries, politicians control the central bank. They freely use their authority to embezzle outrageous sums from the state’s vault, and no one dares question them. This menace has kept citizens of most nations blessed with a vast array of natural resources, such as Nigeria, impoverished and practically living from hand to mouth.
In the cryptoverse, it is almost impossible for any one entity to control more than 50 percent of the network. Even the Bitcoin community has sharply criticized Bitmain’s dominance of the Bitcoin network with its 42 percent hashrate. Wernick added:
“Everybody has the same access to it at any point in time, just different units of it according to whatever their own personal budget constraints are. But nobody has privileged access to it, except, you could say, maybe the miners who pay to produce it and they take a business risk associated with it and anybody could choose to get into the mining business.”
The bitcoin evangelist has always subscribed to the idea that central banking systems should be accountable to the people in place of technocrats who run the government.
With cryptocurrency, Wernick believes much of the spending power will shift once the ability to facilitate large deficits and currency debasement upends the relationship between the government and its citizens.
Wernick began his career at Salomon Brothers and the National Bank of Detroit. He founded, and sold, the risk management firm AVI Portfolio Services Company, Inc. before focusing on his private investment portfolio. He currently serves on the advisory boards of DataWallet and Qtum.