Several BAYC and CryptoPunks collectors who put up their tokens as collateral backing for Ethereum loans have been unable to settle their dues. Crypto analysts believe this could mark the onset of the first major liquidation crisis in the NFT industry. BendDAO Loans and Possible Risks Rumors of a liquidation spiral began earlier this week following a post about NFT lending platform BendDAO. BendDAO is a web3 protocol that allows users to take out loans in Ethereum using their non-fungible…
In a recent interview with the Economic Times India, billionaire investor Tim Draper shared his views on the future of the crypto industry and its regulatory journey. Amongst many things, the popular investor believes a decentralized currency offers more perks for society than many fiat currencies.
Draper Shares Views on Crypto and Decentralization
The interview initially focused mainly on India’s startup industry. Draper revealed his thoughts on the prospects of the space amidst the current economic downturn. However, he later gravitated towards decentralization, a topic that saw the veteran venture capitalist avidly express his enthusiasm.
Draper stated that he’s interested in “anything” that strives to decentralize the world:
I like anything that is trying to decentralize the world. That can be a decentralized currency or a free speech platform.”
He brought up a couple of decentralized structures including digital currencies for which he highlighted Bitcoin. Later on, he discussed institutional resistance to BTC and the general crypto industry.
Draper insists top authorities like the Indian central bank view cryptocurrencies and related offerings as assets with little to no true worth. For example, according to the India Central Bank’s deputy governor, a CBDC could kill the crypto craze. This stance raises issues with balancing the rise and adoption of technological advancements with regulation, not just in India but globally.
Decentralization – A Threat to Governmental Power
Notably, Draper insists that those in leadership, particularly the larger governments, feel a decentralized world poses a threat to their power. A view he strongly disagrees with. According to the investor, Bitcoin is much better than traditional mediums of exchange. Draper pointed out BTC’s ease of use, global reach, transparency, and immutability of blockchain transactions.
I think Government officials really have to weigh their personal power with the good for society,” said Draper. “And Bitcoin is just a better currency, a better way to operate. It’s global. It’s transparent and it keeps a perfect record.”
Ultimately, Draper claims that jurisdictions that embrace the rise of decentralized structures will be all the better for it. The billionaire encouraged nations to accept the transition as those who do will be the winners over the next 4 decades. He likened shunning digital assets to blocking the internet, it would be a 40-year setback.
Draper also cited a recent meeting with a team from El Salvador’s crypto-friendly president. The venture capitalist claimed to have been envious of the nation’s progress since it made Bitcoin its national currency.
According to him, they discussed NFT utility, smart contracts, and various DeFi models. Draper’s view is that El Salvador is 5 years ahead of the US despite being just 80 years old. He stressed that this is new, better, faster technology that is going to make society more wealthy.
Only a Matter of Time till Large-Scale Adoption
As regards his business model, the venture capitalist expressed hopes to someday generate funds entirely in cryptocurrency. He described a business model that exclusively utilizes Bitcoin. Of course, the volatility of the crypto market could be an issue, El Salvador has run into some problems given BTC’s price drop.
However, the investor pointed out that those saying El Salvador’s BTC adoption isn’t working haven’t been there. Hence, Draper recommends that the government show more faith in the people. According to him, the authorities could be inflating their importance at the expense of the people.
Despite Draper’s lack of faith in the government, he is confident of an imminent large-scale transition from fiat to crypto within the next five years. Draper says as companies begin to facilitate the retail exchange of Bitcoin, more common purchases will be possible using the cryptocurrency. Regarding centralized fiat money:
I don’t think the people will want it,” Draper said. “It’s only a matter of time.”