Bitcoin mining heavyweights Bitmain, which controls over 60 percent of the entire Bitcoin network hashrate, has hinted towards funding the creation of blockchain-centric private central banks.
Blockchain Powered Central Banks
In a keynote speech at the DC Blockchain Summit organized by the Chamber of Digital Commerce and Georgetown University’s Centre for Financial Markets and Policy, the mining manufacturer disclosed that Bitmain is seriously considering investing in 20 to 30 startups that would function as blockchain private central Banks.
The distributed ledger powered institutions would bridge the gap between the fiat world and the cryptocurrency ecosystem.
Jihan Wu opined that private central banks are different from traditional central banks and “are better at creating more convenient user experiences for consumers.” He is also aware of the lucrative market that lay in such a venture:
“We all know that a central bank is a very profitable business.”
The successful entrepreneur declared that his company is interested in working with private central banks that would also be responsible for issuing private currency as a service and in absolute compliance with the necessary laws governing the blockchain industry.
“We at Bitmain are very interested in private central bank startups that are going to use blockchain technology to issue private currencies and set it as a service, in a legal way. We would like to invest in 20 to 30 startups whose efforts are focused on this unique emerging economy,” he said.
Although Bitmain is already the biggest bitcoin miner so far, the firm is not relaxing on its oars. Wu has even revealed the firm’s ambition to extend its mining operations to Canada.
This move comes from the fact that the North American country is cryptocurrency friendly with abundant electricity. Plus, the Chinese government can just wake up one day and decide to crush Bitmain’s mining operations due to its authoritarian nature and lack of support for bitcoin and other cryptocurrencies.
It might interest you to know that Bitmain has also been investigating artificial intelligence for quite some time now and has created AI solutions. Despite these developments, mining will remain company’s most reliable revenue generator.
Contrary to the opinions of some analysts who, in the past, claimed that the crypto markets would finally consolidate around some established coins, Wu doesn’t agree with that speculation and has said that:
“The fact is that Bitcoin is declining and we can see that lots of other cryptocurrencies like Ethereum and Dash grow very fast, and you just cannot explain if you think the theory is right that the market will consolidate.”
The business mogul firmly believes that the over 1,500 coins and tokens that exist in the crypto ecosystem today all have something to offer since there is nothing like a perfect cryptocurrency.
“There are no perfect cryptocurrencies on the market, so the market will require more cryptocurrencies,” he declared.
That being said, the United States Securities and Exchange Commission (SEC) has always been against unregistered ICOs that engage in the sales of securities. In the latest development on March 7, 2018, the SEC has stated that all crypto trading platforms that help users exchange tokens generated from initial coin offerings must be appropriately registered.
Wu opined that he sincerely believes a lot of tokens can be categorized as securities but the regulators need to formulate helpful guidelines that won’t crush innovation.
“Most tokens will very likely fall into the definition of a security and will be subject to the regulation of a security. But I believe regulators need to prepare a good answer on how to deal with such business innovations.”
On February 26, 2018, BTCManager reported that an open letter was written by the anonymous founder of Cobrabitcoin stating the need to change the Bitcoin proof-of-work (PoW) algorithm in order to end Bitmain’s dominance of the bitcoin network.
Now, Bitmain wants to diversify their dominance by funding blockchain central banks that will issue cryptocurrencies. Will this move go down well for the entire bitcoin industry or will it attract more criticisms? Only time will tell.