‘Blockchain Makes Cryptocurrencies the Inevitable Future of Money,’ Says Malta’s Prime Minister

Malta’s Prime Minister, Joseph Muscat, has recently stated he believes “blockchain makes cryptocurrencies the inevitable future of money,” during a speech addressing the general debate of the 73rd Session of the General Assembly of the United Nations (UN).

During his speech, Muscat touts Malta launched itself as the “blockchain island,” as it was the first jurisdiction in the world to regulate blockchain technology, which “previously existed in a legal vacuum.” He added:

Blockchain makes cryptocurrencies the inevitable future of money, more transparent since it helps filter good businesses from bad businesses. But these distributed ledger technologies can do much more.

The Prime Minister went on to note blockchain tech can create healthcare systems in which patients have “real ownership of their medical records.” These, per his words, can also help verify whether humanitarian assistance is reaching its intended destination.

Muscat added, among other use cases, that using blockchain tech it’s possible to “make sure nobody is deprived of their legitimate property because of compromised data.” Corporations, he noted, will be able to “become more accountable for their shareholders,” and states will “need to move to regulate an environment where citizens trust the handling of their own data.“

Malta has notably been looking to become the world’s friendliest jurisdiction for cryptocurrency companies, presumably to both lead in the nascent industry and to reap the benefits these companies bring. According to Bloomberg, Binance claimed it would “hire up to 200 people” in the country to carry out its relocation.

The nation’s rules on cryptocurrencies and blockchain technology reportedly determine how brokerages, exchanges, and traders operate, and offer “legal certainty in a space that is currently unregulated.” In a tweet at the time, Muscat touted Malta will be a “global hub” for market leaders in the sector.

Its approach hasn’t just attracted Binance, the world’s largest cryptocurrency exchange by trading volume. As CryptoGlobe covered OKEx, another large crypto exchange, is set to launch a new platform for security tokens in the country. After dealing with a banking blockade in Poland, crypto exchange BitBay also announced it would move to Malta.

According to research conducted by Morgan Stanley, Malta already sees most of the cryptocurrency trading volume flow through it, thanks to crypto exchanges like Binance being based in it. Per Morgan Stanley, most crypto exchanges are based in the United Kingdom, but these only see 1% of the market’s trading volume.

Bitcoin Proponents Debate a Potential Hard Fork for Inflation

  • Bitcoin Advisory founder Pierre Rochard is asking bitcoin community to consider the implementation of inflation.
  • Rochard argues that transaction fees alone may not be enough to sustain miners in the future. 

Pierre Rochard, founder of consulting firm Bitcoin Advisory, has addresed a debate in the bitcoin community over whether transaction fees will be high enough to support the network’s continued use. 

Bitcoin Inflation Debate

According to Rochard, who is also a self-proclaimed proponent of BTC’s scaling solution lightning network, the community must question whether transaction fees alone will be enough incentive for miners in the future. As outlined in the original white paper, bitcoin’s total supply is limited to 21 million coins. 

While the final BTC is not expected to be minted until after the year 2140, the block reward will continue to decline over the coming century. Miners, who facilitate transactions and secure bitcoin’s network, will have to rely more upon transaction fees as a source of income, as BTC rewards continue to fall.

Some are now arguing that bitcoin may need to introduce perpetual inflation to remedy the situation, which would mean altering the original 21 million BTC total supply.

Rochard said, 

There’s an open question of will transaction fees be high enough – or in the aggregate total – enough to provide transaction finality...will bitcoin have to hard fork in inflation?

The Bitcoin Advisory founder asked the community to consider the state of altcoins, many of which operate on an inflationary protocol. Rochard acknowledged that confirmation bias may be clouding judgment in regard to bitcoin’s managed development and that the potential for inflation should at least be considered, 

There’s confirmation bias. We’re all very bullish on bitcoin, I certainly am, and so we want to pick out arguments and facts that support our position rather than trying to see all sides of a debate and have a more balanced view. Or at least have some level of uncertainty and self awareness in how much support we actually have for our arguments.

Future of BTC

Rochard pointed to an article written in 2015 by Silicon Valley entrepreneur Ryan Selkis, under the name TwoBitIdiot, arguing that bitcoin needed inflation despite the controversy of the idea. He also pointed to the increase in block size from 1MB, which at the time was considered blasphemous to bitcoin’s protocol, as analogous to the idea of introducing inflation. 

Rochard concluded that the bitcoin community has “a good 10 to 20 years to argue about it,” before inflation becomes a pressing issue. 

 

Featured Image Credit: Photo via Pixabay.com