07.10.2020
Transcript of an interview with Robby Schwertner CryptoRobby🦋 by Oliver Tanzer (many thanks!) of Austrian Newspaper FURCHE on #Blockchain!
Find the original article here (in German), transcript in English:
In a crisis, people are in need of financial stability. Some take refuge in the purchase of gold and real estate. At the beginning of the pandemic, many also stocked up on cryptocurrencies, causing a short-term rise in the price of Bitcoin and other digital currencies. Would you agree with people saying that Bitcoin is the new gold?
Schwertner:
It has certainly proved its value in the crisis. The price of Bitcoin did not skyrocket as much as gold, but it has remained stable and that is a positive sign. That was not always the case. Provided, of course, that the price remains stable, it is a good store of value. Like gold. It is the digital gold! Statistics are showing that 31 percent of the working population in South Korea has invested in cryptocurrencies. In Austria, it is only two to three percent.
FURCHE:
But in view of the exchange rate fluctuations, you would not fill your safe with it.
Schwertner:
To invest in Bitcoin is at present still like going to the casino. You can try it out with smaller amounts. It is not there to save money for grandchildren or to believe that you can make a big fortune. It should be amounts that you are also willing to lose. It is still a risky investment. But it is the future, the technology is still in its infancy. However, blockchain technology can do much more than just serve as a portfolio.
FURCHE:
It is held very high by people who want to democratize society more. Why?
Schwertner:
First, blockchain enables direct contact between economic partners. You no longer need a bank, but can transfer amounts to other people securely, fast and almost without any deductions. Payment transactions are returned to a direct interaction between the participants, and I think that’s a wonderful aspect. Passing money on through the bank is economic inefficiency. The economy thrives on the elimination of inefficiencies.
Cryptocurrencies are not there to save money or make a big fortune with it. One should be able to easily cope with the sums one uses in case of loss.
FURCHE:
But there have been some teething troubles in the past, such as the possibility to launder money or smuggle it past the tax authorities via cryptocurrencies.
Schwertner:
For that, people would have had to stick to cash. With it one can drive delightfully to Liechtenstein and open an account. With cryptocurrencies there could even be systems in which the tax would be withheld automatically. In this sense, cryptocurrencies would be an advantage, not a disadvantage.
FURCHE:
A new directive is currently being negotiated in the EU Parliament to make cryptocurrencies less vulnerable to crime. How can one imagine this, if anonymity prevails here?
Schwertner:
Bitcoin is no longer anonymous. It is a combination of transparency and anonymity. This state is called “pseudonym”. In other words, it can be traced very well when which money flows were moved where. There is also a special forensic department at the Ministry of the Internal Affairs that can successfully track how companies send their Bitcoins back and forth. That is an important development. Control is a good thing. Cryptocurrencies that remain completely anonymous probably have no future.
FURCHE:
You mentioned trust. When it comes to money, trust is linked to the state. How can blockchain technology replace that?
Schwertner:
Blockchain is actually called the trust technology. People trust the algorithm. No one can steal the encrypted codes.
FURCHE:
But there are repeated reports of hacked cryptocurrency exchanges.
Schwertner:
But that doesn’t happen because the blockchain would be insecure. But because, as with money, many a storage location be insecure. If somewhere a theft is done, no one blames the monetary system actually. To Bitcoin: There were certainly criminals who pulled money out of people’s pockets with the promise of making them rich. But here, too, the system is not the culprit. The Bitcoin code is public and has been verified thousands of times. It is very robust. So far Bitcoin is not has been hacked. In this sense Blockchain interweaves transactions with each other, as in a solid fabric. In this sense, one trusts the programming.
FURCHE:
What if the programmer makes a mistake?
Schwertner:
This happens with blockchains again and again, and also with new cryptocurrencies. We live in an age comparable to the conversion from horse-drawn carts to automobiles. Of course, there will be the odd mistake in development. But generally, the advantages of the automobile will clearly outweigh the disadvantages.
FURCHE:
Are cryptocurrencies the death of banks?
Schwertner:
I don’t think so. The systems will converge, i.e. the banks will converge to blockchain. We will see a new world of money. The currencies will converge and offer bitcoin-based currencies. The EU is still in discussion. But China has been working on a digital renminbi for three years. It is already being tested as an app among 500,000 workers in some regions. And it works. The central bank also has access to this currency again.
FURCHE:
You mentioned other possible applications above.
Schwertner:
Current developments are moving towards services being integrated into products via blockchain. In the case of industrial companies, this is about payment transactions, accounting and other important things. In everyday life, the forms of application are even more colorful. The Austrian blockchain company “Riddle & Code” has programmed a “Car Wallet” for Daimler Chrysler, an electronic purse for cars. With it, cars will be able to pay parking fees or refueling independently in the future. A payment system integrated into the car is an important component for autonomous driving. After all, who is supposed to pay for services when cars are moving around the streets without drivers?
FURCHE:
There remains the disadvantage that only a few people understand the technology and the products are sometimes extremely user-unfriendly. At least this is the conclusion drawn from relevant studies.
Schwertner:
In fact, a lot of work still needs to be done on user-friendly solutions. But that in turn is an opportunity for start-ups and many new jobs. It is a long process and it has only just begun.
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