Cold thinking: Cryptocurrencies will ultimately move towards pragmatism, but blockchain is not the only remedy!
Cryptocurrencies, through blockchain technology, theoretically offer faster and lower-cost payment solutions, especially in cross-border transactions. However, in reality, Bitcoin has not fully realized its original intent as a "trustless medium of exchange." On the contrary, Bitcoin has increasingly become a speculative asset, lacking widespread use cases. Therefore, despite the various advantages of blockchain technology, whether it can become the infrastructure of financial markets remains debatable.
When discussing the advantages of blockchain, a common statement is that it can store data in a decentralized manner, allowing all parties involved to view the original data, thus avoiding high dispute costs caused by information asymmetry. This method can indeed address the issues of data authenticity and responsibility allocation, but the cost and privacy issues of blockchain mean it is not suitable for all scenarios. Blockchain typically requires expensive and slow storage to maintain the immutability of data, which can lead to privacy concerns—non-transaction parties such as competitors or journalists can also access this data. In comparison to blockchain, the method of public key encryption combined with receipts is more efficient.
"Blockchain can indeed provide higher transparency, security, and accessibility, but we do not necessarily need to rely on blockchain to achieve these goals." Prasad emphasized. He believes that many issues can be resolved through other technological means, and do not necessarily require blockchain to accomplish. Blockchain is not the only remedy!
Assets like Bitcoin, although considered scarce in the eyes of some, do not possess intrinsic value. If the government starts buying Bitcoin and uses it as a reserve asset, it is likely to face significant risks from price volatility.
"If the government starts using taxpayers' money to buy Bitcoin, it not only poses a threat to the valuation of cryptocurrencies but could also trigger severe market volatility," Prasad warned. He believes the strategic and rational basis of such a reserve plan is questionable, especially when cryptocurrency prices are volatile, as government funds could face significant losses.
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India's "Buffett" Prasad
Cold thinking: Cryptocurrencies will ultimately move towards pragmatism, but blockchain is not the only remedy!
Cryptocurrencies, through blockchain technology, theoretically offer faster and lower-cost payment solutions, especially in cross-border transactions. However, in reality, Bitcoin has not fully realized its original intent as a "trustless medium of exchange." On the contrary, Bitcoin has increasingly become a speculative asset, lacking widespread use cases. Therefore, despite the various advantages of blockchain technology, whether it can become the infrastructure of financial markets remains debatable.
When discussing the advantages of blockchain, a common statement is that it can store data in a decentralized manner, allowing all parties involved to view the original data, thus avoiding high dispute costs caused by information asymmetry. This method can indeed address the issues of data authenticity and responsibility allocation, but the cost and privacy issues of blockchain mean it is not suitable for all scenarios. Blockchain typically requires expensive and slow storage to maintain the immutability of data, which can lead to privacy concerns—non-transaction parties such as competitors or journalists can also access this data. In comparison to blockchain, the method of public key encryption combined with receipts is more efficient.
"Blockchain can indeed provide higher transparency, security, and accessibility, but we do not necessarily need to rely on blockchain to achieve these goals." Prasad emphasized. He believes that many issues can be resolved through other technological means, and do not necessarily require blockchain to accomplish. Blockchain is not the only remedy!
Assets like Bitcoin, although considered scarce in the eyes of some, do not possess intrinsic value. If the government starts buying Bitcoin and uses it as a reserve asset, it is likely to face significant risks from price volatility.
"If the government starts using taxpayers' money to buy Bitcoin, it not only poses a threat to the valuation of cryptocurrencies but could also trigger severe market volatility," Prasad warned. He believes the strategic and rational basis of such a reserve plan is questionable, especially when cryptocurrency prices are volatile, as government funds could face significant losses.