The Daily Hodl
  • FEATURES
    • News
    • Bitcoin
    • Ethereum
    • Ripple and XRP
    • Altcoins
    • Trading
    • NFTs
    • Blockchain
    • Futuremash
    • Regulators
    • Scams
    • Crypto 101
  • HODLX
    • Latest Stories
    • FAQ
    • Submit Guest Post
  • INDUSTRY ANNOUNCEMENTS
    • Latest
    • Press Releases
    • ChainWire
    • Sponsored Posts
    • Submit Your Content
  • CRYPTO MARKETS
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Binance Coin (BNB)
  • BEGINNERS
    • What Is Bitcoin?
    • What Is Blockchain?
    • What Does Hodl Mean?
    • How to Pay Your Bills with Bitcoin
    • Best Bitcoin FAQs
    • Example of Bitcoin’s Purpose
    • Cryptocurrency Has Multiple Meanings
    • Authenticator Alert – Securing Your Crypto
  • SUBMIT
    • Guest Post
    • Press Release
    • Sponsored Post
    • Advertise
  • EMAIL ALERTS
  • DAILY HODL MIX
No Result
View All Result
  • FEATURES
    • News
    • Bitcoin
    • Ethereum
    • Ripple and XRP
    • Altcoins
    • Trading
    • NFTs
    • Blockchain
    • Futuremash
    • Regulators
    • Scams
    • Crypto 101
  • HODLX
    • Latest Stories
    • FAQ
    • Submit Guest Post
  • INDUSTRY ANNOUNCEMENTS
    • Latest
    • Press Releases
    • ChainWire
    • Sponsored Posts
    • Submit Your Content
  • CRYPTO MARKETS
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Binance Coin (BNB)
  • BEGINNERS
    • What Is Bitcoin?
    • What Is Blockchain?
    • What Does Hodl Mean?
    • How to Pay Your Bills with Bitcoin
    • Best Bitcoin FAQs
    • Example of Bitcoin’s Purpose
    • Cryptocurrency Has Multiple Meanings
    • Authenticator Alert – Securing Your Crypto
  • SUBMIT
    • Guest Post
    • Press Release
    • Sponsored Post
    • Advertise
  • EMAIL ALERTS
  • DAILY HODL MIX
No Result
View All Result
The Daily Hodl
No Result
View All Result

Former CIA Cryptographer Says Bitcoin Is Perfect Vehicle for ‘Entire Shadow Banking System’

by Daily Hodl Staff
November 12, 2018
in Bitcoin

Bill Barhydt, a former cryptographer at the Central Intelligence Agency and the founder of cryptocurrency investment platform Abra, is mapping out how cryptocurrency can operate outside of the current regulatory environment to power a crypto bank.

In a new Off the Chain interview with host Anthony Pompliano of Morgan Creek Digital, Barhydt notes that his collective experience in various industries – from intelligence to the internet to finance – has all come together, allowing him and his team to lay the groundwork for a radically different banking model for everyday people.

In addition to the CIA, Barhydt worked as a quantitative analyst in fixed income research at Goldman Sachs and as the former technical director at Netscape where he focused on e-commerce and banking projects.

Barhydt says he’s well-versed in money service business rules because of his work on Dodd-Frank where he joined a group of tech leaders to address and refine the policy language regarding remittance rules.

His extensive knowledge base led him to strategize and figure out the best way to leverage cryptocurrencies to reinvent modern banking. The key to a new model is recognizing the capabilities and the power of Bitcoin, a worldwide currency with a global user base, as programmable money.

Says Barhydt,

“When you’re putting fiat into your Abra wallet, the experience looks like Venmo, like a Venmo deposit, but what you’re really doing is you’re depositing money at an exchange which then automatically buys Bitcoin for you, and then, in the case of Ripple, enters into that multi-sig contract where you effectively short Bitcoin versus Ripple. And Abra takes the long position on that contract versus Ripple. All of that happened in the background without you having to know.”

The end game is to use cryptocurrency in a new paradigm – beyond the regulators.

“The long play for Abra is to develop a crypto bank. What does a crypto bank mean? From my perspective, it reverses the model of a central bank-based custodianship model to one where the consumer is in control of their own funds – whether it’s for investing, which there are lots of examples beyond just investing in crypto, credit or person-to-person money transfer and remittances, which is one of the big reasons I started Abra in the first place.

You can actually do all of those transaction types in a model where you’re in control of your own money for the first time, without having to understand the nuances of how the crypto works, or Abra having to be licensed in 175 countries to execute those transactions.

We’ve developed a model which is free of, effectively, SEC, CFTC or European e-money style regulation because of the fact that we’re not a custodian of consumer funds. We’re not developing swap execution facilities or other security-based products doing this. We’re entering into very simple crypto contracts which are effectively able to roll over either daily, weekly, monthly, whatever system we set up.

[the_ad id="42537"] [the_ad id="42536"]

And that also gets around a lot of the nuances of CFTC regulation as well. For people who say these look a lot like CFDs which are illegal in the US, that’s true, but we’re not actually implementing them the same way that a leveraged European-style CFD is implemented. These are zero-leverage, instant capability for roll over. Abra is always the counterparty, which, again, gets around a lot of those regulations.

So the point is, I can effectively develop a legal, crypto-based bank in every country in the world, minus the OFAC-sanctioned countries, with zero licensing that puts the consumer in control of their own money – that’s not hackable from Abra’s perspective, because if you hack me, yes, you might be able to steal my crypto, but you can’t steal the consumer’s crypto.”

How might regulators react to this model?

Barhydt says that if you give consumers 1s and 0s to hold on their own on a hard disk, that’s not something that’s regulated – because it’s not contraband material, like child pornography.

“Even in China, it’s not illegal to hold your own private keys on a hard disk or a smart phone.”

According to Barhydt, a greater understanding of Bitcoin and its power as programmable money will eventually lead to a new competitor to the existing banking system.

“I see an entire shadow banking system. And I don’t say ‘shadow’ in the negative ‘this-is-bad’ sense. I say ‘shadow’ in terms of finally being competition to The Man.”

Check Latest News Headlines


 
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Submit a Press Release

Industry Announcements

  • DPAT Raises Private Funding To Enhance Web 3.0 Ecosystem
    June 2, 2023
  • Pink Moon Studios Reveals ‘KMON: World of Kogaea’ Pioneering a New Era in Web 3.0 Open-World Gaming
    June 2, 2023
  • OKX Proposes Industry-First BRC-30 Token Standard To Enable Bitcoin and BRC-20 Token Staking
    June 2, 2023
  • Devour and AlterVerse Partner To Bring the World’s First Web 3.0 Food Ordering Marketplace to the Metaverse
    June 1, 2023
  • Bumper’s Breakthrough DeFi Protocol Set To Reshape Options Pricing
    May 31, 2023
  • MetaZone Secures Funding To Expand the World’s First Tokenized App Platform for the Metaverse
    May 30, 2023
  • The QWAN Launch – A Token for the Global Gaming Industry
    May 30, 2023
Submit a Guest Post
ADVERTISEMENT
Bitcoin
$27,199.29
$27,199.29
0.15%
Ethereum
$1,903.88
$1,903.88
0.05%
Cardano
$0.381926
$0.381926
1.51%
XRP
$0.526563
$0.526563
0.52%
Dogecoin
$0.073038
$0.073038
0.67%

Spotlight

  • Analyst Known for Calling Bottoms Predicts 2019-Style Bounce for Bitcoin (BTC) – But There’s a Big Catch
    May 28, 2023
  • Arthur Hayes Says Explosive Times Ahead for Bitcoin and Financial Markets as US Debt Deadline Approaches
    May 28, 2023
  • Former Goldman Sachs Executive Says ‘Clear’ Bull Trend About To Manifest for Crypto and Technology Stocks
    May 28, 2023
  • Here’s What’s Accelerating De-Dollarization Trend, According to Macro Guru Lyn Alden
    May 28, 2023
Coinfest Asia Banner
DON'T MISS A BEAT
Crypto headlines delivered daily
to your inbox
BTC, ETH, XRP news alert options
By joining The Daily Hodl news list you agree to our
Terms and Conditions and Privacy Policy.
Featured Image: Shutterstock/Billion Photos

Cryptocurrency news and analysis, covering Bitcoin, Ethereum, Ripple, XRP, altcoins and blockchain technology

Categories

Bitcoin • Ethereum • Trading •
Ripple and XRP • Altcoins •
Blockchain • Regulators •
Scams • Crypto101 • HodlX •
Futuremash •
Industry Announcements

ABOUT US | EDITORIAL POLICY | PRIVACY POLICY
TERMS AND CONDITIONS | CONTACT | ADVERTISE

JOIN US ON TELEGRAM

JOIN US ON TWITTER

JOIN US ON FACEBOOK

COPYRIGHT © 2017-2023 THE DAILY HODL

No Result
View All Result
  • FEATURES
    • News
    • Bitcoin
    • Ethereum
    • Ripple and XRP
    • Altcoins
    • Trading
    • NFTs
    • Blockchain
    • Futuremash
    • Regulators
    • Scams
    • Crypto 101
  • HODLX
    • Latest Stories
    • FAQ
    • Submit Guest Post
  • INDUSTRY ANNOUNCEMENTS
    • Latest
    • Press Releases
    • ChainWire
    • Sponsored Posts
    • Submit Your Content
  • CRYPTO MARKETS
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Binance Coin (BNB)
  • BEGINNERS
    • What Is Bitcoin?
    • What Is Blockchain?
    • What Does Hodl Mean?
    • How to Pay Your Bills with Bitcoin
    • Best Bitcoin FAQs
    • Example of Bitcoin’s Purpose
    • Cryptocurrency Has Multiple Meanings
    • Authenticator Alert – Securing Your Crypto
  • SUBMIT
    • Guest Post
    • Press Release
    • Sponsored Post
    • Advertise
  • EMAIL ALERTS
  • DAILY HODL MIX

© 2023 The Daily Hodl