Chainside Founder: Bitcoin Brings No Innovation To Society
An interview with the co-founder of the Chainside project Federico Tenga who is a libertarian, blockchain implementation consultant and bitcoin enthusiast. In 2017, Federico was teaching students in North Korea about blockchain and bitcoin technologies.
Chainside was founded 1.5 years ago. It is a Rome-based blockchain startup which helps big companies to adopt bitcoin payments. The team has already managed to partner with Italy’s largest taxi fleet Cooperativa RadioTaxi. As a result, more than 3000 drivers accept bitcoin through a mobile application today. The Chainside team has also contributed to the development of the crypto industry by releasing a Python 3 Segwit-compliant Bitcoin library called “BTCpy” aimed to help other developers in their researches.
Federico Tenga told Blockspoint why bitcoin is the king among other currencies, explained why there are only three situations where blockchain can be useful and how human history can prove that using cryptocurrency is more natural than using fiat.
Privacy, censorship resistant and international payments are the three whales
Some companies use blockchain as a PR and marketing tool, others do it because their customers really need it, yet others implement blockchain because it can be really useful in their sectors. For example, VPN services distributors use blockchain because it has a lot of advantages when it comes to privacy. We can make a conclusion that if a business has nothing to do with privacy, is not censorship-resistant or does not provide payment solutions, it means that the blockchain implementation is just for PR.
Speaking of online payments, blockchain is good for such services. In Europe, we can easily use credit cards. In countries with an undeveloped banking service, like African countries, Bitcoin is the easiest solution to accept payments from the US, for example.
Blockchain is also censorship resistant. One may say that we have no problems with censorship in our Western civilization. But if you want to book a hotel in Iran, the only possible way to pay for it in advance is to use bitcoins. Nowadays, there are plenty of Iranian hotels that ask to pay with bitcoins or ethers because their banking system is quite isolated.
The only way of the non-monetary implementation of Bitcoin I see now is data notarization. It is easier to build something on top of a secured system than use an unreliable structure and try to build something secured on top of it.
Bitcoin is not new but the best
It may sound funny but Bitcoin brings no innovations from the social point of view. The social model, when money is controlled by people and not by governments was set thousands year ago. People used to trade or exchange valuable objects, or we can call them valuable tokens which were gold, spices or other goods. Bitcoin allows us to return to the natural state of human economy. So from the social perspective, Bitcoin is much more tested than fiat currencies. Fiat money is relatively new, while the social model used in bitcoin has been tested through thousands of years of the whole human history. It is a very solid and natural tool.
History shows there is only one intermediate commodity to change goods and mostly every country has only one national accepted currency. For the monetary application, one currency is good enough, so the idea of multiple money does not make any sense. It is natural to use only one cryptocurrency, and I think it should be bitcoin.
Bitcoin is more useful for international transactions because it allows avoiding problems with money changing. For some people, it is the only possible way to make a payment.
Now we are trying to make bitcoin payments more accessible for enterprises. We see that current solutions are focused mostly on private users or small businesses, so we are building solutions that meet the needs of big companies.
Each payment system has a similar structure, like a transaction layer and a settlement layer. I don't see why blockchain should be different. Developers of other coins try to make everything on a single settlement layer. The Bitcoin blockchain is one which is fully working and using multiple layers.
There are hundreds of blockchains which doesn't make sense. In the coming years, we will see a lot of consolidation processes in the decentralized world. There is no technology that can be stable from a zero point, and Bitcoin will be volatile until we provide a wide enough level of adoption.
Bitcoin for sure has many problems but other blockchains do not solve them. All blockchains have a scalability problem. Some of them have managed to solve it by reducing security, while others use out-chain technologies. Bitcoin is trying to solve the problem of scalability without affecting security. For example, Lightning Network and off-chain solutions. These innovations were implemented by Bitcoin, and other systems just try to follow it.
Regulators are taking it wrong
When I first heard of Bitcoin from my friend, it seemed to me very interesting and great from the technical aspect. The money system which is not controlled by anyone has advantages from the monetary point of view. It is a good tool for storing funds which are not issued by any country. It means that neither banks nor governments have power over it.
Bitcoin was born to be self-regulated. So the only regulation we need today is the consensus algorithm which is Proof-of-Work. We have to build the decentralized global infrastructure where regulators do not matter anymore.
Governments now are trying to regulate payments as much as they can. But some of them ignore cryptos, and when they finally start accepting them, it may be too late. Now we have to create some bridges between the innovative world and the traditional banking systems in order to migrate from banking to crypto.
Now the situation in the crypto sphere is as bad as it used to be for any financing company which works with payments. It takes a lot of money and time to deal with regulators, especially for getting a license allowing exchange services between euro and bitcoin, for example. There is no specific regulations over cryptocurrencies, but to get compliance with the traditional money regulation is quite difficult. Unfortunately, things are going to be worse as many regulators want to intimidate the community by money laundering and speculations to make tough standards, and it might be a problem for merchants.
Photo: Sofya Danilova, Blockspoint