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America is an “aging empire” and is lagging behind in cryptocurrency

BeInCrypto spoke exclusively to Omid Malekan, a professor at Columbia Business School and an author Rebuilding trust: the curse of history and the crypto cure for money, markets, and platforms.

Omid Malekan first discovered bitcoin in 2013, after a friend asked him to buy some on the friend’s behalf. “Before, I had no interest. My impression of bitcoin, like many people at the time, was that it was just some weird thing on the internet that attracted drug dealers,” Malkan said. However, interacting with Bitcoin soon changed his mind. His “epiphany” came when cryptocurrency exchange Mt.Gox was hacked in 2014.

At the time, it was the largest exchange of its kind in the world, handling more than 70% of all bitcoin transactions worldwide. It was the idea of ​​digital scarcity that triggered the revelation. For the first time in the history of the Internet, something valuable and irreplaceable has been stolen. This was not possible before Bitcoin. It was this epiphany that sent me down the rabbit hole. This has turned into a whole career.”

Fast forward a decade later, and Malkan taught students about cryptography at Columbia Business School. It is probably the most prestigious business school in the world after Harvard. He has also authored several books on the subject. The latest is Rebuilding trust: the curse of history and the crypto cure for money, markets, and platforms.

Malkan is currently an adjunct professor at Columbia Business School.

Aging empire

As an American, Malkan took a front row seat watching the United States flip on cryptocurrency. Running a crypto company, or even trading cryptocurrencies, in the country is getting more and more difficult. Banking regulators have increasingly tried to push cryptocurrencies out of the financial system. The law firm Cooper & Kirk described this as: “Operation Chokepoint 2.0.” (The original Operation Choke Point was an initiative launched by the Department of Justice in 2013 to investigate banks that do business with high-risk businesses such as payday lenders, firearms dealers and online gambling sites. Critics argued that it unfairly targets legitimate businesses and limited access to credit. The Trump administration ended the process in 2017.)

Gary Gensler’s tenure as chairman of the Securities and Exchange Commission was marked by an anti-cryptocurrency stance. The Biden White House now sees cryptocurrencies as more than to threaten out of chance.

Malkan described the position of the US government as lacking in information. “It backfires,” he said. I am almost ashamed to say that America is now behaving like an old empire that only feels threatened by a new kind of financial system. And rather than trying to figure out how to evolve to embrace it, there’s this arrogance within regulatory circles that, well, we’re going to shut it down. We will deal with cryptocurrency on our terms…using very ancient laws. ”

“Eventually, this technology will become mainstream because it solves important problems,” Malkan explained. It’s also very cosmopolitan, and it’s borderless, so if it doesn’t find a home in America, it will find a home elsewhere. This means that a lot of jobs and tax revenue will now accrue in countries outside the United States.”

A solution in search of a problem?

One of the most common criticisms of cryptocurrency and blockchain is that it is a “solver in search of a problem.” Many of the world’s most influential financial and technical minds have criticized the technology, including Bill Gates and economist Paul Krugman. Warren Buffett called cryptocurrency a “rat poison box” and said, “They will come to a bad end.”

How does Malkan answer the claim that cryptocurrency does not solve any real problems?

“I could spend hours talking about this,” he said. “When you hear someone make this claim—and I’ve heard them—almost globally, it’s a wealthy elite living in a very developed world. It’s usually someone like a professor or a banker in a place like New York or London. It’s very significant when they say it. Things like, well, we don’t need blockchain or crypto because we have credit cards. Apparently, it doesn’t occur to these people that the vast majority of people on the planet don’t have a credit card. Merchants and companies want to find an alternative to credit cards because of the fees they force On pushing it. Even in places like New York.”

He said this dismissive stance is an insult to the millions who use cryptocurrencies. “To say this is to say that they are all idiots and have no idea what they are doing.”

“If we were to break it down into specifics, there are many people who have used bitcoin as a way to protect their purchasing power from extremely high inflation. There are also many artists who have found that NFTs give them new ways to make a living and interact with their fans. There are companies that are starting to use things like currencies. stablecoins to offer more efficient cross-border payments. The list goes on and on and on.”

Tribal encryption

Malkan has plenty of warnings about cryptocurrencies as well, particularly “speculative excess.” But, most of all, he hates “the tendency to rally behind those prophets and outspoken leaders who then turn criminals and psychopaths like Sam-Bankman-Fried.” It’s “a very cryptic thing.”

The cryptocurrency community also tends to treat their favorite coins like soccer teams. They are constantly fighting to prove that their project is the best.

“I think sometimes they act like they’re actually religious movements,” Malkan said. “They have their profits, and then they disenfranchise those within the movement who dare question any fundamentalist point of view.”

“I’m always amazed when I meet people who really believe in one project and one coin and reject every other project out there. To me, it just doesn’t make sense. There has never been a technology that has only one application.”

Money has always given itself over to these kinds of tribal feelings. And then, unfortunately, this is the world we live in of social media and polarization and tribalism in everything.”

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