Stepan Gershuni: You Will Be Able to Buy Something With Bitcoin, Not so Sure About Other Currencies
Posted on 03-26-2020.
When the quarantine is over and there are people in the streets and shops once again, we may see a world that isn’t the same as the one before. On the one hand, many people and organizations will learn new tools and ways to work remotely. On the other hand, the world economy will take some time to recover.
ForkLog’s Max Bit talked about the world during and after the quarantine with Stepan Gershuni, Bitcoin evangelist and the CEO of Credentia, one of the companies developing technologies to counter the virus outbreak.
Are state governments ready for remote work?
No. They were never really able to do it. State governments have a different task. Remotely or not, they have to make society function effectively. They don’t seem to manage it either since the global economy is halted, planes don’t fly, factories don’t produce, people lose jobs and companies go out of business.
But, interestingly, the situation catalyzed many important changes. There’s a lot of really fascinating things that have been planned and technically ready 5 years ago but haven’t been implemented just because nobody cared. It worked, so nobody tried to fix it.
Now, we have a crisis and things start moving. The U.S. introduced online court hearings. They could’ve done it much earlier. People don’t need to commute to gather in one place for a divorce case. In Russia, there is some progress with online medical prescriptions. Education is also a great example.
Going back to the original question, governments did fail, but it wasn’t for remote work, it’s because of the economy.
What do you think about the Fed’s decision to give out free money?
If I was to describe the dominant thought I see on Twitter for the last few days in one word, it would be “decoupling.”
There are economic problems. The recession is real and it will continue for some time. Countries across the world act within their capabilities and, at the moment, the only country with unlimited capabilities is the U.S. The Fed works to keep the market going. They will also pay citizens just so they can buy food. Although, in the U.S. many people went to stock up on ammunition before they went for toilet paper. When you have a country of hundreds of millions of people who are armed and hungry you have an issue. But the U.S. is a well-developed country where people mostly have some reserves. In other countries, things are worse. You miss one paycheck and you’ve got nothing to eat for the next month.
To solve it, governments issue money. This means the devaluation of the U.S. dollar. Central banks of other countries also issue money, devaluing and inflating their national currency. Currently, we have an interesting situation where the Fed prints fantastic amounts of money devaluing the dollar while other currencies drop relative to the dollar. As a result, there is no asset that would withstand the crisis.
There is a conclusion that is almost too obvious. National currencies fail and there’s a need for an asset to buy things with. Bitcoin is such an asset. The reason Bitcoin was created is the unlimited money issuance by the Fed and central banks around the world. There’s a limited amount of coins and 90% are already mined. Also, in two months we’ve got halving.
I believe that this is where Bitcoin can present itself. I don’t mean the price, really. The price against USD will grow simply because USD gets cheaper. I’m talking about a certain intrinsic value of Bitcoin as a currency, not as an asset. Bitcoin isn’t entirely ready for this. I mean, it will work. It won’t be able to support the world economy right now. It would take a couple of years until there are tools available for businesses to work with Bitcoin until people learn to interact with it, and so on. But it is viable as money to use during the crisis. You will be able to buy something with BTC, not so sure about other currencies, except maybe the U.S. dollar.
Watch the full Russian-language interview on the ForkLog YouTube channel
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