Monday, July 15, 2019

Central Banks Turn to Ditch Gold Reserves for Crypto Reserves in 2019

Trailblazer and pioneer Nick Szabo at the recent Bitcoin Summit that held in Tel Aviv University, Israel on Tuesday, shared his predictions and expectations for the cryptocurrency space in 2019.

Bitcoin Could Survive a Nuclear War

According to the professor and smarts contract inventor, Bitcoin’s increasing benefits is set to become more evident this year as unrest and inflation continues to increase. Nick Szabo, famous cryptographer and legal scholar is popularly known for his research in digital contracts and was the first to coin the well-known term, ‘Smart Contracts.’

One of the earliest researchers and contributors to digital currency, he is widely speculated to be the anonymous founder of Bitcoin, Satoshi Nakamoto, having created the precursor to it, which he called ‘bitgold.’

Nick has touted cryptocurrencies to attain increased importance this year, not only individuals but large financial institutions such as central banks as well. Speaking at the first bitcoin summit in Israel, Szabo discussed the history of cryptocurrencies and drew parallels and analogies between conventional methods of exchange, and existing cryptocurrencies serving as a better medium of exchange. Szabo notes that the use of digital currencies would inevitably increase this year, especially in countries and states with unabating conflicts or unrest. He has also touted countries mismanaging their fiat currencies to expect a marked increase in cryptocurrency usage.

Szabo’s prediction has already begun to show signs of manifestation, even since the latter part of last year’s bear market. The complete ‘financial apocalypse’ of Venezuela’s economy and the currency has forced the government to seek recourse in an official digital currency. While Venezuela’s case seems like a lost cause, Iran’s is practically achievable and possible. The country has decided to employ an official cryptocurrency for cross-border payments in a bid to skirt the recent US sanctions imposed on them. Ukraine which is also in a proxy war with Russia has also seen a marked increase in cryptocurrency usage.

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Szabo’s argument: a digital currency might just survive any war, even unlike a gold reserve.

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Bitcoin Usurping Gold Reserves

Szabo has also suggested that central banks of different countries might even begin to turn to digital currency as a means of a reserve. While the Swiss Bank might serve as ‘a bank of central banks,’ it is not exactly politically neutral. Rather than turning to gold reserves (which was particularly targeted by Nazis during the war by the way), central banks might see Bitcoin and other digital currencies as a better reserve. He said of gold reserves:

“The other problem with gold reserves is that they’re physically vulnerable. When the Nazis conquered countries in Europe, the first place they went to was a central bank’s gold reserves.”

Szabo has touted Bitcoin to see increased adoption this year following the implementation of second-tier solution — the Lightening network — as users gradually ditch BCH for an improved and faster BTC.

Adedamola Bada
I'm Damola, a computer engineer from Obafemi Awolowo University. A crypto enthusiast, marketer, and writer who is seeking to achieve career excellence through hard work and positive contribution to the organization that aspires for excellence. Contact me on [email protected]

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