Wences Casares: Bitcoin is the New Gold | Big Think

Bitcoin may be the most important social experiment that’s going on right now. Because it is, um, at the social level, it's an experiment. Technologically, it's not an experiment; it is robust and it works. But because at the social level it's an experiment, there's still a chance that it fails. Therefore, it's risky, and nobody should invest in Bitcoin an amount of money that they cannot afford to lose because of that risk.

But there's also a chance that it works out well. If it works out well, it may be the first thing in 5,000 years that finally replaces the gold standard, which has been, uh, the standard for quite a very long time. It becomes a new, um, meta currency that sits atop all currencies. I don't think Bitcoin should or would ever replace any national currencies. I think that salaries need to be paid in local currencies, and countries need to have their monetary policies. You need lenders of last resort, and the systems that we have in place, um, probably need to stay at that level.

But people need to have options, and I think that Bitcoin will become probably the currency of the internet or of the digital world. But also, in that sense, a new currency that sits atop all currencies. For certain transactions that you do, either because they're on the internet or because they're international, it makes more sense to do them in Bitcoin than in any other currency.

Eventually, gold is decentralized. Nobody decides how much gold there is. It's, it's decentralized. There's not one company or one country or one person deciding how much gold there is. There's also not one company, one country, one person deciding what's the price of gold; it's decided in the market. Also, there's not one person, one country, or one company deciding what you can exchange gold for. It's totally decentralized, and it's also sort of anonymous.

If I pay you for something with gold, there's no trace of that. If I pay you for something with cash, it's absolutely anonymous. So I think that we need to regulate Bitcoin to have basic consumer protections, to prevent uh, criminal activity on it and to prevent money laundering. But I think doing so is not hard, and I think doing so is doable with the regulations that we already have in place to account for cash.

Cash is very anonymous, and we have regulations in place to manage the anonymity of cash. Each country has regulations to address people having foreign currency. So between the regulations that exist for cash, gold, and foreign currency, you have all of the regulatory infrastructure you need to deal with Bitcoin.

But what we are seeing right now is, because a lot of the regulators are still getting their arms around Bitcoin, the first reaction is a scare reaction that tends to over-regulate, which wouldn’t be good for the regulators and wouldn’t be good for the industry. Um, but I think we will get there, and it’s not so complicated.