Peter Schiff vs. Icarus, Technology, and Implication for Blockchain
Peter Schiff — a strong critic of Bitcoin had his bank closed by Puerto Rican regulators because they could not maintain the net minimum capital requirement. As a result, accounts were frozen and customers lose access to their money. They also didn’t allow a sale to highly qualified buyers who could inject capital far over regulatory minimums.
Peter Schiff is an authority when it comes to finances, he is an American stock broker, CEO and chief global strategist of Euro Pacific Capital Inc… He has also authored 9 books, all about the American economy and finance. But he has been a very vocal critic of cryptocurrencies especially Bitcoin and Ethereum. His major contention with cryptocurrencies is that they are not backed by anything other than people buying them, he feels this undermines their value. As though the concept of money is not humans agreeing to ascribe value to material be it paper or metal. The value of money is something agreed on by people living in an area, be it physical or virtual. So why was he undermining cryptocurrencies? Until he wasn’t?
Peter Schiff reminds me of Icarus because it intersects with Peter Schiff’s story on so many levels.
Britannica summarizes Icarus’s story thus;
“When the king turned against Daedalus and imprisoned him, Daedalus secretly made wings for himself and his son Icarus, intending to escape to Sicily. Despite his father’s warnings, Icarus flew too close to the sun; the wax holding the feathers to his wings melted, and he fell into the sea and drowned.” You can read a much more detailed version here.
This myth succinctly lets its readers know that humans have always dreamt of flying. And what is flying? If not a means to easily transport ourselves between places. What are the wings Daedalus fashioned, if not a means to that end? What are those wings? If not technological gadgets? Peter doesn’t understand that the concept of money hinges heavily on what technology is. If technology is to make life easier, isn’t that what money has come to be? Before currencies, people battered objects and ivory tusks for sacks of food. However, these exchanges were unequal and there was why money (paper money really) came to meet this need. Money being money today didn’t happen in the blink of an eye, it’s an idea people had to slowly warm up to and assimilate into their lives.
Human nature is in such a way that if something hangs around long enough, its fault is most likely to be made evident. With frequent use, this is bound to happen. To fight against technology would be to hold humanity back. Fighting the need to solve our problems will only keep making more problems for us. The truth is that Bitcoin could solve Peter’s problem because no balance has to be maintained to keep the bank going.
Now, Peter hopes to sell his bank for Bitcoin if the Puerto Rican regulators allow it.
Icarus flew too close to the sun, burned, and crashed into the sea. All these he did, despite Dedalus’s warning. Icarus loved flying so much that he ignored Daedalus. I think that’s the case here. The truth is Peter could have avoided the current happenings that have befallen Euro Pacific Capital Inc. This is not to say the crypto space is without its problem.
The crypto space is still young, and as such, it is still being structured. The space is not bereft of scams, pyramid schemes, rug pools, etc. Just a few months ago, Terra’s Luna crash sent it into a death spiral, and to say the least, a lot was lost. This is what regulations like the EU’s MiCA are aiming at solving. But the EU is not alone, America has also rolled out its regulation governing the crypto space. Whether these regulations will clamp down on innovations in the industry is the question on the mind of most. However, they are important so investors and institutions become comfortable with digital assets. This will no doubt increase the growth of the industry as digital assets will now play a regulated role in the economy. Going forward, things could change.
Decentralization is one of the most lauded properties of blockchain technologies in general, this allows it to process transactions and other things much faster than a traditional monetary institution. With the influx of governmental agencies in the field, is there any room left for decentralization? Or to what degree would blockchain startups be decentralized? These questions and more beg to be answered.
Certain questions should be asked of technologies and innovations before stances are taken on them. For something to qualify as a technological piece, it must make life easier for its wielder. Blockchain technology and cryptocurrencies no doubt make life easier. With all this being said, I hope Peter Schiff and Euro Pacific can come out of their current predicament and embrace technology.
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