In recent days, the creator of Ethereum expressed his opinion on this issue. He stated that the secret for their success lies in decentralization.
In mid-2019, there was a debate that marked a change in the cryptocurrency market and the world. It is no other than the controversy that Facebook aroused about Libra, which provoked multiple discussions all over the world.
Libra’s influence was such that Central Banks around the world decided to launch their digital currencies. In recent days, the founder of Ethereum, Vitalik Buterin, brought the issue back, supporting private digital currencies.
As this issue was debated some months ago, it is good to remember the main foundations of the discussion on private and public currencies. In this way, it can be easier to understand Vitalik Buterin’s points of view.
When Facebook announced Libra, the discussion on whether private companies can and should own digital currencies emerged. The reason for the loud noises about the issue was the handling of information for fear that the companies would have too much power.
The governments were those that mainly feared about this issue, even going as far as to question on several occasions Facebook and Buterin himself.
In the end, the administrators of a country are the maximum representatives of the public sector, theoretically representing the citizens’ interests and ensuring their security.
Therefore, this discussion gives rise to Central Bank Digital Cryptocurrencies (CBDC), a proposal that seeks to compete with private digital currencies. On various occasions, Crypto World Journal has published articles including this subject.
Once the issue to be discussed is known, it is easier to observe the comments on digital private currencies that Buterin made, highlighting that he proposes decentralization as a fundamental element.
Last March 4th, Buterin talked about his position on digital currencies, specifically about the power of decentralization, even without blockchain.
He stated that digitalization cannot be stopped and that decentralized digital currencies would be more favorable to many than State-controlled CBDCs.
The creator of Ethereum noted that there are three existing types of digital currencies: sovereign, corporate and decentralized. He also highlighted the challenges faced by CBDCs.
He believes that the main challenge with central banks, and even with corporate cryptocurrencies, is the concentration of power, storage or data collection. He explained that potentially central intermediaries can exercise a very fine degree of control over who can and cannot participate in these systems.
Vitalik envisages that the most attractive future currency will be decentralized and private as it would be more resilient to “centralized bottlenecks.
He said that people have been seeing a lot of situations where even perfectly legal things eventually become restricted. This occurs because the administrator of the centralized bottlenecks just wants to exclude a given category of users. This leads Vitalik to think that that is the reason why people will continue to be interested in fully decentralizing digital currencies.
Through his comments, Vitalik Buterin proposes the solution to last year’s discussion. Even if blockchain technology is not used, the decentralization of digital currencies is the key element for their future.
By Alexander Salazar