An Interview with Michael Casey, WeTrust Fintech Advisor
Michael Casey is a Senior Advisor at the MIT Media Lab’s Digital Currency Initiative. He also consults for businesses on the challenges and opportunities found in blockchain technology, and acts as an advisor to Agentic Group. He is the co-author of The Age of Cryptocurrency: How Bitcoin and Blockchain Are Challenging the Global Economic Order. Prior to this, he worked as a journalist at The Wall Street Journal for 18 years. He acts as the Fintech Advisor for the WeTrust project.
Hi Michael, thanks for chatting with us. In your book, you differentiate between small b bitcoin, referring to bitcoin as a cryptocurrency, and capital B Bitcoin, referring to blockchain technology. Given the emergence of so many other blockchain projects, what are your thoughts on bitcoin as a cryptocurrency?
Bitcoin seems to be alive and well. Now, it won’t be the currency of choice for Mom and Pop to go buy groceries, but it has other enormously positive qualities. In much of the developing world, in places with a history of badly managed currencies, there exists a need for an alternative secure store of value. Even in places with a more developed financial system, there exists a need for a way to move funds across borders. In China, for example, when their economy slowed down and people started moving money out, Bitcoin became a way to circumvent state run controls.
I also think generally, we need to think strategically about Bitcoin’s place. A lot of the focus in the early days was on the adoption play, and the question of whether merchants in the US would accept Bitcoin. This seems like a lot of misplaced attention — to me, it’s as much about Bitcoin’s place in the future of money generally, and its very presence as a proven decentralized mechanism is fundamentally important. Central banks are considering creating their own digital currencies, and that’s all in response to Bitcoin. The world wouldn’t have this much blockchain enthusiasm if not for Bitcoin, and there’s a strong case to be made that none of the other cryptocurrencies will have the same fully decentralized power that Bitcoin has.
You mentioned that the central banks of some nations are discussing creating their own digital currencies. What effect would this have on Bitcoin?
I think it could go either way on Bitcoin, all depending on how far it goes. If you think about it in terms of whether average Americans are going to start using digital currency from the central bank, that would be a reason not to use Bitcoin. But it’s also quite possible the Bitcoin becomes an element of the global fabric of currency interchange that will emerge in this new digital monetary system. You could potentially have all these siloed digital currencies around the world, and the only way to trade between them would be with Bitcoin. I’m not sure these nations would be willing to make the ledgers of their digital currencies interoperable, and if they don’t, Bitcoin would be a convenient way to intermediate between currencies.
What originally drew you to the WeTrust project?
I was struck by WeTrust’s use of the ROSCA concept. I’m a big believer that many of these blockchain initiatives won’t get far unless we integrate them with pre-existing cultural practices. I think there’s a fundamental problem with Silicon Valley solutions being imposed on people who don’t appreciate or understand them. WeTrust, on the other hand, is taking what exists already and expanding it. I also believe we need to interface blockchain’s trustless systems with existing trust based societal structures, and a ROSCA is an interesting way to approach that. It leverages social capital, and it’s a situation where a blockchain solution can scale and expand on what’s already there, instead of coming in and wiping everything away from scratch.
Do you have any thoughts on WeTrust’s TrustCoin model?
I believe many of these systems for creating value in community based systems will thrive more if they have a native currency or a native token within the system. I don’t necessarily think TrustCoin itself will become a global currency, but it’s valuable for serving the purpose for which it was created. The TrustCoin itself will have real value. Generally, I find projects with a token structure like that extremely useful.
WeTrust is currently offering TrustCoins through a token crowdsale. Do you have any thoughts on the token crowdsale model as a way for projects to raise funds?
I think it’s really interesting. How people go through the process of raising funds to build things is always a fascinating phenomenon. That being said, the token crowdsale model can be fraught with risks, and I’m very happy WeTrust paid a lot of attention to those risks. I like the notion that with these crowdsales you can fund exciting developments around infrastructure. A protocol itself doesn’t always pay off, but if you have a token attached to it, and the token is an integral part of how the protocol functions, devs will buy into it. It’s an interesting way to incentivize entrepreneurs to develop infrastructure that otherwise the government or some other non-commercial or non-profit organization would have to fund.
I know in some of your writing, you discuss how the current financial system disadvantages many of the people throughout the world. How do you think blockchain projects like WeTrust can help solve this problem?
Well, I feel the entire financial system is inefficient, and has been designed to incentivize rent seeking by those who control it away from the rest of us. The misaligned interests between customers and bankers is a fundamental problem. And those bankers have managed to hold our politicians hostage, which is why decentralized digital currencies will be interesting. The banks have become so big that they inherently require bailouts and guarantees, no matter how much we demand they go bankrupt. Even with all the regulations put into place since 2009, the problem still hasn’t been solved. Those of us who are excited by Bitcoin, blockchain, and fintech are looking for a way to rethink money, without these institutions that create friction and bottlenecks.
WeTrust is important because it’s precisely a community-based model of finance, removing a sense of dependence on big institutions. The idea of mutualizing credit and insurance has been around for some time, with credit unions and mutual insurance, but WeTrust takes it to a level where you can build this without the infrastructure and without being plugged into the existing financial institutions. All of a sudden, who can use these types of systems is no longer limited, and the system itself is more efficient because it’s plugged into the blockchain. If WeTrust can remove friction, while at the same time building itself on the mutualized community model, I think it has a great chance to establish alternatives to centralized money.
Thanks for believing in our vision and chatting with us, Michael!
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