Former Central Intelligence Agency employee and famed whistleblower Edward Snowden is discussing the future of digital currencies and the improvements he would like to see made in the Bitcoin infrastructure.
In an interview with television producer and journalist Naomi Brockwell, Snowden says digital currencies are here to stay, but that central bank digital currencies (CBDCs) offer almost zero advantages over traditional fiat money.
“I think it’s [cryptocurrency] inevitable. I think we’ve already seen states recognize that digital currencies will be the next stage of money because they’re trying to create competitors now effectively to Bitcoin…
So-called central bank digital currencies, which is just a rebranded version of fiat currencies which don’t have any really desirable properties for the public at large beyond the government being able to more effectively disburse stimulus payments.
But that unfortunately means, and I think a lot of people don’t have the financial sophistication to realize, that actually means they are simply taxing you in a new way because that stimulus payment is debasing the value of the currency at large.
Digital currency in the general sense, cryptocurrency in the general sense, do not solve the problem of inflation and hidden taxes in that way.”
Snowden points out that although Bitcoin can be a remedy for inflationary money printing practices, the network still has not overcome Bitcoin’s privacy and throughput issues.
“As you say the problem with everybody moving to digital currencies is we know the Bitcoin network doesn’t support throughput. Unfortunately, the Bitcoin network as it exists does not provide the privacy protections really necessary for these kinds of transactions at scale.
And I think it should and it could and it’s clear to me the developers realized this should be done but for whatever reason… They haven’t actually moved to do this which is puzzling to me because now they’ve had years to do it.”
Snowden admits that, despite Bitcoin’s flaws, he uses the cryptocurrency and still prefers it over traditional credit cards.
“When we talk about this, the inevitably of this transformation towards digital currency, I’m not picking winners and losers. I don’t have a horse or a care or a concern as to who wins this beyond I think what the world needs is a truly independent means of enabling private transaction.
If that’s Bitcoin, great, fabulous. I’ve used Bitcoin before I’ll continue to use Bitcoin. But it’s very difficult for me to use Bitcoin and yet that is a huge improvement over credit cards which I cannot use because those networks are not even pseudonymous in the way a Bitcoin transaction would be.
This is to say that cryptocurrency at this point has… pretty well-understood flaws. I don’t think there’s any reason to say they can’t be resolved. If we’re talking off-chain transactions, cross-chain transactions you know there are a lot of groups working on this. My big question is why are you guys taking so long.”
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Featured Image: Shutterstock/Tithi Luadthong
