Echler Solomon Feng
Nov 13, 2018

Breaking the Mould

If there is a lesson to be learned from the current horrendous social & economic Venezuelan experience, it is undoubtedly the failure of their currency, the Bolivar, why everyone else there is making the switch to cryptocurrencies.

Venezuela is just a peek of what is in store for developing economies with a “defeated” financial system. Cyprus is another one that has a growing population which is now embracing the mass adoption of cryptocurrencies; this after its own economy failed, resulting in its government defaulting. If scenarios like these become commonplace or the norm of the future, we are in for a big scary ride as to what is happening in the crypto space - as the welcome alternative from failing economies.

Some distinguished academics argue the modern financial system is about to explode on a massive and global scale if people such as Overstock CEO Patrick Byrne are to be believed. A self-proclaimed evangelist on everything crypto, Patrick has often proclaimed of a future where the modern financial system has failed on just about everything being that “big Keynesian, magic tree Ponzi scheme”. And with its demise, everyone will run [in time] to cryptocurrencies as a safer refuge – triggering what will be a global adoption.

These rather bold statements were recently revealed when Byrne was interviewed by crypto YouTuber Naomi Brockwell, a New York-based channel that focusses on everything Blockchain. In that same interview, Byrne pointed to the Venezuelan experience as a sneak preview of the future when that same modern financial system fails in the developing world.

Byrne also added that whether that cryptocurrency darling of the future will be Bitcoin or Ether, only time would tell. We are just at the nascent stage of cryptocurrency adoption, and a strong one will eventually emerge.

This is not the first time that someone of Byrne’s stature and reputation has made similar calls. "He [Byrne] is not the only person to say that the modern financial system is a Ponzi scheme. There were already others who are voicing similar concerns in the past. For instance, the head has likened cryptocurrencies to Ponzi schemes. Significantly, bitconnect indicated early this year that it was forced to down the shutters following the accusation of running a Ponzi scheme. Therefore, Byrne comparing crypto with Ponzi schemes are nothing new," said Crypto Vibes.

Patrick Byrne who heads Overstock has led the company to be one of the first big retailers to accept cryptocurrencies from way back in 2014. It has a vision of being a major global online retailer portal (bigger than Amazon perhaps) that can process your transactions across boundaries with cryptocurrencies (Bitcoin mostly) as the mode of payment – which saves you the trouble of foreign exchange conversions. For someone in Africa ordering from America, this enables the buyer not to have to go to a bank to buy US dollars, process the wire transfer, which involves documentation from KYC’s to Invoicing, and has exorbitant bank-to-bank transfer fees to boot.

For those who subscribe to the Byrnes perspective of a crypto abundant future, and George Soros is among them, Overstock is a promising company. Its share price fell 27% per cent this past October, the kind of dip that had some investors looking to come in – albeit cheaply. Having said that the stock has endured a volatile and stomach-churning ride these past 12 months, hitting a high of nearly $90 and now languishing at around $17.

If the US dollar collapses, dragging with it all major currencies to what will be a failed financial system in the future (The Byrnes worldview), there is no use using fiat money to shop in Amazon.