A former ASIC chairman has predicted a grim future for Bitcoin unless the original cryptocurrency changes the way it operates.
At the Australian Blockchain Conference earlier this week, Greg Medcraft, currently Director – Directorate for Financial and Enterprise Affairs, OECD and previously Chairman of ASIC, attempted to outline many of the risks associated with a Blockchain environment, and then positioned Bitcoin in that framework.
Medcraft initially outlined four broad risk categories that are specifically associated with innovation in Blockchain.
- “Relating to the ownership and use of data stored on the distributed ledger. I think ‘privacy’ is going to be a big, big topic in the next two or three years.”
- “Whether it be in areas such as ‘identity’ or ‘authentication’ or ‘cyber security’. “
- Consumer and investor protection issues. “Whether it be in governance of the entities or disclosure – many of the fundamental policies which will apply in a digital world in terms of competition, interoperability – you can’t have one particular system that is not interoperable; that creates competition issues, which then creates issues for consumers and investors. Then also we’ve got to think about market integrity – we need a transparent market, that’s the best protection. Also, Education – education is really important for people who are going to try to use reliable technologies.”
- Transferability and traceability. “In terms of regulators, tax authorities and law enforcement agencies.”
“I think for these reasons, Bitcoin doesn’t have much of a future, unless it changes – a lot.”
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In addition, Medcraft noted that in 2016 and 2017, there had been around 900 ICOs (Initial Coin Offerings), nearly half of which had failed; giving some weight to the risks outlined above.
He also observed that there is still a “wild west” mentality in much of the Blockchain environment and there is a need for the “rule of law” to come to play in order to permit monetary applications to become more main stream.