The development of Bitcoin over the years has been nothing short of impressive. From being an asset for making transactions over the Internet, the most popular cryptocurrency in the world has grown into a full-blown financial revolution.
However, just as it is with other revolutionary concepts in the tech and financial worlds, there are those who still doubt Bitcoin and its utility as investments.
Late last week, we were treated Stephen Schwarzman, the billionaire investment mogul and the chief executive of Blackstone, the largest alternative investment firm in the world, shared his opinion on Bitcoin.
In an interview with Fortune Magazine, Schwarzman, like many others before him, seemed to have a split opinion concerning crypto and blockchain. While he heaped praise on the latter, he was a lot more skeptical about the prospects of Bitcoin and other altcoins viz a viz investments.
Speaking about blockchain, Schwarzman admitted that the technology has the potential of making some significant changes to several aspects of human life, while adding that the technology is holistically “interesting.” However, when it came to Bitcoin, he alluded to not knowing much about the asset. In his words, the difficulty in understanding what Bitcoin is has led to an erosion in his interest.
Schwarzman also claimed that he is also concerned about the unregulated nature of cryptocurrencies, while adding that this nature could fuel their use for “bad behavior.”
Dissecting his argument
In several ways, Schwarzman is quite right. His concern of a lack of understanding is the same problem that a lot of people have with cryptocurrencies; they try to get what it is, but given the complexities involved, they fail and subsequently give up on it entirely.
As for the bad behavior argument, there really is no escaping that one. We all know the “exploits” being pulled off by criminals on the Dark Web with Bitcoin, and given the fact that the asset itself was designed to be anonymous and decentralized, curbing these excesses hasn’t proven to be easy at all.
Several powerful figures have come out to decry the current state of things, including U.S. President Donald Trump, when he infamously bashed Bitcoin and Libra (the stablecoin project from Facebook) a couple of months back.
I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity….
— Donald J. Trump (@realDonaldTrump) July 12, 2019
Hope for better regulations
However, this isn’t to say that things would necessarily continue to stay that way. Several moves have been made to bring some form of regulation into the crypto space, with the most significant being a set of recommendations from the Financial Action Task Force (FATF), a global leader in Anti Money Laundering (AML) enforcement.
Back in June, the FATF released guidelines for cryptocurrency asset custodians, asking them to implement measures for identifying their customers and tracing the movement of assets on their platforms. Suspicious activities are also to be immediately reported to appropriate law enforcement and financial authorities in due time.
Amongst other things, it is hoped that this will help identify criminal activity and keep the space “clean.” It is possible that increased regulations could provide the governments of the world with more of an incentive to allow cryptocurrencies to operate as they should.