Blockchain and the Big-Banks — #2

We discuss Blockchain, Bitcoin, capitalism and Big-Banks in our interview with the Business Development Director of Blockchain@UBC, Stephen Thompson

Ali: Could you briefly explain what Blockchain@UBC is and its purpose?

Blockchain@UBC, is a platform that has been set up by both myself and Dr. Victoria Lemieux. It was conceived to research use cases for Blockchain technology in the field of records management. It caters mainly to information professionals. We look at use-cases for different sections in both industry and also academia as well as civil liberties.

Salman: How did you get involved in the Blockchain sphere?

I stumbled into it backwards, I came into Bitcoin with no prior experience with the technological environment, in fact, my first red pill, if you like, was silver. Looking into the precious metals market, I got a lot of this silver… I was convinced that I was about to make a fortune but then the price soon went south. A year later, I heard about this thing called Bitcoin. I thought, well, let’s see what I can find out about it. I knew the banking system was printing money and the history of where that goes, so I thought this Bitcoin is worth getting into, especially as it has a finite supply. I thought, ‘ahh maybe Bitcoin can be the asset that rises in value’. I was more interested in Bitcoin the currency than the Blockchain technology behind it. My involvement in the Blockchain sphere became more prominent with my participation in Dr. Victoria Lemieux’s research of Blockchain technology for record keeping.

Salman: Your interest in the legacy banking models and search for a better or alternative system, somehow led you to come across Bitcoin?

My initial liking for Bitcoin was on how it holds against inflation, then I saw it as a means of holding wealth outside of the banking system. Now, I see it as a hedge against the collapse in the value of financial assets which include fiat currencies. I started to learn about what the banking system is actually doing to save itself through various practices. But they all amount to a great transfer of wealth from society to the banking system. Bitcoin, whether we are talking about the currency or the protocol, offers a much more reliable and decentralized system for society. So far, the banks have no means of manipulating it in the way that they have done with precious metals. We haven’t really seen the situation before in history where society has a viable, non-institutional alternative to banking, that anyone can enter and appears to be agnostic to anything the banking elite does to undermine it.

Ali: Do you remember where exactly it was that you first heard about Blockchain?

I heard about it from the Keiser Report. Max Keiser was pushing Bitcoin in the spring of 2013. I started watching these YouTube videos, I noticed some channels where people were talking about it. It seemed almost like this underground movement of libertarians, technologists, entrepreneurs and their ideas about politics and economics echoed my own.

Salman: What excites you most about Bitcoin?

I think the fact that it’s got institutional support. At the time when I bought in, in early 2013, it was the anarchists and cyber-punk people that were championing it. I see Bitcoin as potentially continuing to influence the Blockchain’s evolution, playing a role in high-value mechanisms like the supply chain and pension systems. Bitcoin may even break the banking system’s manipulation of gold and silver… we may even see a reconstituted US Dollar backed by the Bitcoin protocol!

Salman: What do you think are the biggest misconceptions that people have about Blockchain?

I’m glad you asked me about that because i’ve been to a fintech conference on Wednesday and I can’t believe all the nonsense that people still come out with about bitcoin. There was a keynote speaker at the conference whose knowledge had not been updated since February 2014. He was saying that people who hold Bitcoin are wishing to avoid paying taxes, are most likely to be criminals, involved in illicit drug trafficking and money-laundering. He also said Bitcoin is anonymous, it is not anonymous. It is pseudonymous, which means that although the public can view all the individual transactions, the parties behind each of them are expressed as a communication between two machines, or from one Bitcoin address to another Bitcoin address. The Fintech community still don’t get it. They like the idea of the cheapness and the speed of transactions which the Blockchain leverages, but I think they’re going into it for the wrong reasons. Every time I read about banks talking about the lower costs of running the Blockchain, they are almost always on the cusp of saying that the automation will help them to justify making staff layoffs.

Salman: It seems like they have true capitalistic motivations in diving into Blockchain as opposed to social good?

I would say that Bitcoin upholds the old principles of productive capitalism more than the speculative capitalism of the banking system. The banking system has got used to getting free money from the government (quantitative easing) at zero percent interest. It has made a small number of people rich, but this is not capitalism. The underlying fiat currency is created through the monetization of government bonds… it is effectively created as debt. This type of fiat currency steals value from the people who use it because its quantity of supply is far in excess of that which society requires.

Salman: What are some of the top applications you see in Blockchain?

Top one is remittances, real-time transactions for any type of digital value and peer-to-peer co-operation. Much of society’s ideas about itself have been shaken by government’s incessant need to make people dependent on its centralized infrastructures that have slowly become corrupt. A recent documentary called Hypernormalization likened the Occupy Wall Street protests to a movement about management. Blockchain may well become the same but on a much larger scale.

By Ali Serag El Din and Salman Alam