Aside from occasional blisteringly anti-crypto commentary from the likes of Warren Buffett and Bill Gates, one of the crypto industry’s most consistent and vocal naysayers is IT industry analyst Jason Bloomberg.
Bloomberg is a published author, Forbes contributor and president of the firm Intellyx, which helps enterprises integrate new technological developments and trends into their business models.
Bloomberg also devotes a significant amount of his time to attending crypto and blockchain-related conferences and events, speaking and debating with industry leaders. His public stance, however, can be characterized as anti-crypto, but more accurately it is anti-decentralized, permissionless crypto – against the original dream of truly decentralized, peer-to-peer interactions laid out in the Bitcoin (BTC) white paper that captured the imaginations of early adopters.
Last month at BlockShow Americas in Las Vegas, Cointelegraph had a chance to speak with Bloomberg about why he wants to “shut down” decentralized crypto, what he sees as the threat of crypto-related crime and why he comes to blockchain industry events like BlockShow.
What’s wrong with permissionless blockchains
Olivia Capozzalo: So, you have a reputation for saying some pretty bold things about cryptocurrency. This spring you wrote an article in which there was a sentence stating something like “We need to make cryptocurrency as we know it illegal.”
Jason Bloomberg: Right. The challenge that most cryptocurrencies have is that they run on a permissionless blockchain infrastructure. By permissionless, we mean that there’s nobody in charge, right?
In a proof-of-work system, every transaction processor has to process the transactions. Because it’s permissionless, anybody can sign up as a miner, including criminals.
Now, not all miners are criminals, obviously, but criminals are welcome to be miners. There’s nothing stopping them from being miners. As a result, many criminal enterprises, including organized crime syndicates, have gotten into the mining business.
There’s really no way to stop this, aside from moving away from permissionless blockchain-based approaches.
So, when I say, “Shut all the cryptocurrencies down,” what I’m really saying is “shut down the permissionless ones.” If cryptocurrency is going to survive, we’ll have to move to a permissioned infrastructure.
OC: Just hypothetically, if people start taking you up on this call to action, what would that look like? Do you have a vision of how that would start to affect what we know today as the crypto industry?
JB: Well, in practical terms, it would be very difficult to shut down, say, Bitcoin, because it doesn’t exist in any one country. So each country would have to decide what laws it wanted to create in order to make transactions illegal, or whatever it would be.
What I would expect to happen is, over time, as various organizations and governments, as well as banks and Wall Street trading firms realize that permissionless cryptocurrency has these issues, then gradually the trend would be to encourage permissioned systems versus permissionless – and that would drive down the value of Bitcoin and other cryptocurrencies that run on permissionless systems.
So if you drive down the value sufficiently, then it is no longer cost-effective to mine the cryptocurrency. And at certain point, then, essentially it will fall apart.
Nobody will be running transactions because there will be no money made in conducting transactions, and fewer and fewer countries will allow cryptocurrency. And hopefully, other cryptocurrencies that are based on permissioned systems will essentially take the line and investment is going to move to them.
But I would say that the permissionless ones will essentially fade over time. There will be less interest in them, they’ll be less valuable, and fewer and fewer people will want to mine them.
Watch the full interview with Jason Bloomberg here: