In a recent interview, former Central Intelligence Agency (CIA) employee and National Security Agency (NSA) subcontractor turned whistleblower, Edward Snowden, argued that the price and value of bitcoin is an expression of the “large population” that believes in its “usefulness” as a means of exchange.
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Edward Snowden Discusses Intrinsic Value of Bitcoin
Famed whistleblower, Edward Snowden, recently spoke in favor of bitcoin’s capacity to function as a money during an interview with McSweeney’s.
Snowden describes distributed ledger technology as comprising a “new kind of database” on which “history … can’t be manipulated,” which Snowden also argues comprises the fundamental intrinsic value underpinning bitcoin.
Snowden stated: “Imagine that instead of today’s world, where publicly important data is often held exclusively at GenericCorp LLC, which can and does play God with it at the public’s expense, it’s in a thousand places with a hundred jurisdictions. There is no takedown mechanism or other “let’s be evil” button, and creating one requires a global consensus of, generally, at least 51 percent of the network in support of changing the rule.”
Snowden Argues “Large Population” Believes in Bitcoin as Monetary Commodity
Snowden gave a critical appraisal of the value ascribed to fiat currencies, stating: “What makes a little piece of green paper worth anything? If you’re not cynical enough to say ‘men with guns’, which are the reason legal tender is treated different from Monopoly money, you’re talking about scarcity and shared belief in the usefulness of the currency as a store of value or a means of exchange.”
On the subject of gold, the former CIA employee asserts that the precious metal is “worth so much more than its limited but real practical uses in industry” because “people generally agree it’s worth more than its practical value.”
Like gold, Snowden asserts that cryptocurrencies have “very limited fundamental value,” adding: “at most, it’s a token that lets you save data into the blocks of their respective blockchains, forcing everybody participating in that blockchain to keep a copy of it for you.”
Ultimately, Snowden argues that “the only thing that gives cryptocurrencies value is the belief of a large population in their usefulness as a means of exchange,” adding: “As long as there are people out there who want to be able to move money without banks, cryptocurrencies are likely to be valued.”
“Town-Sized Godzillas of Computation” Being Devoted to Crypto Mining
On the topic of mining, Snowden asserted that the “flaw” in the “brilliance” of cryptocurrency was “the failure to account for Bitcoin becoming too successful,” and the resulting effects of increased prices and adoption on the mining process.
Snowden continued: “The reward for winning a round, once worth mere pennies, is now around one hundred thousand dollars, making it economically reasonable for people to divert enormous amounts of energy, and data centers full of computer equipment, toward the math — or ‘mining’ — contest. Town-sized Godzillas of computation are being poured into this competition, ratcheting the difficulty of the problems beyond comprehension.”
Do you agree with Snowden’s arguments regarding the intrinsic value of bitcoin and cryptocurrency? Share your thoughts in the comments section below!
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