Bitcoins and other crypto coins have truly divided opinions since their advent. A lot of experts and observers have come to terms with their existence and believe they do have an auspicious future. Others haven’t been that easy on them and have constantly attack them on the premise that they are risky, volatile, decentralized and would never be considered a veritable medium of exchange.
It is normal for criticisms to follow any invention. In fact, criticisms should be embraced and used to better the invention. However, there are some criticisms that should be attended to immediately. When a criticism which could threaten the whole existence of an invention is directed at it, then it shouldn’t be taken lightly. One of such criticism is the recent comment of Ajay Banga, the CEO of Mastercard. Speaking at an event in India recently, Mr. Banga has been quoted as saying the following.
‘‘I think cryptocurrency is junk… The idea of an anonymized currency produced by people who have to mine it, the value of which can fluctuate wildly- that to me is not the way that any medium of exchange deserves to be considered a medium of exchange’’.
Mr. Banga added that 95% of the transactions these currencies are used for are in the black market and mainly for things like credit card fraud, drug peddling and child prostitution. It must be noted that Banga is a very powerful man and when he speaks, the world tends to listen. This is as a result of the successes his organization has recorded in the recent past.
However, can we agree with Ajay Banga that crypto coins are junk? In order to answer that question, let us look at his allegations and ask ourselves if he has pointed out anything new. The truth is he hasn’t. These have been the same accusations which had been leveled against crypto currencies in the past and which they have continued to work on to improve the qualities of the coins.
Let’s quickly examine his accusations.
- On value fluctuation: I think it is unfair to always make cryptocurrencies synonymous with value fluctuations. It is a common occurrence with a lot of capital market securities like stocks and bonds. The value isn’t predictable, yes, but so it is with a whole lot of others.
- On being used to facilitate vices: It is true they are a target of these vices to facilitate their businesses because of their decentralization factor. However, the vices have been funded one way or the other before and that is not enough to term these coins junks.
It is true that most cryptocurrencies are anonymized now, but that is because they are still at a stage where they aren’t still totally acceptable by the general public. They surely have a lot to be desired about, but they have come up with some amazing advantages which should be spoken more of too. Hence, they have never and would never be junks.