‘Know your crypto-currencies: Bitcoin never intended to be an investment’

22 Dec, 2017 - 00:12 0 Views

eBusiness Weekly

Taurai Chinyamakobvu describes himself as “an innovation expert and enthusiast . . . with keen interest in blockchain, Bitcoin and other cryptocurrencies.”

The widely known public image of him comes from his work as a marketer and public relations practioner in the Zimbabwean financial sector.

Now, Chinyamakobvu is among a handful of pioneering Bitcoin investors in Zimbabwe, even though he resists the temptation to call himself one.

He moved into Bitcoin somewhat by providence, seldom a conscious decision, when everyone else was still looking the other way, recovering from the global financial meltdown of 2007/08.

As a director of Bitfinance, a financial technology firm, Chinyamakobvu helped found Zimbabwe’s only cryptocurrency exchange, Golix.com in 2015. From only a few dollars trades worth a day at the time, Golix.com trades over $2 million worth of digital money every month.

Chinyamakobvu refused to discuss his Bitcoin-worth (though we suspect he has made a fortune), but in the interview with Business Weekly below, he talks about a number of issues related to cryptocurrencies investments, particularly addressing the widespread fears Bitcoin was a fraud, a bubble headed for an historic burst.

BW: When did you start to invest in Bitcoin?

TC: I have been involved since 2009, but mostly in understanding the innovation. I got bitcoins in 2011, but I did not buy them, I got them from a corporation I was doing work for.

BW: What was the motivation behind the investment, and how did you hear about bitcoin?

TC: I first heard of bitcoin in Japan, and the bitcoin innovation was big news in innovation circles in Japan at the time. A professor in my school spoke about the peer to peer bitcoin ecosystem.

BW: In detail, can you share with us your experience investing in bitcoin.

TC: The key is first understanding the technology behind it. Bitcoin now does look like an investment, but that has never been the intention. The logic behind bitcoin is to have a fast, borderless permisionless peer to peer payment system that enables you to send or receive the currency at best in the next ten minutes. That’s much faster than the international payment system can deliver – where it can take at least 4 days to receive an telegraphic wire. So the idea wasn’t to invest, but to use the technology for this purpose. Now it looks like investing, but this i.e because of exchange rate gains in bitcoin that actually derive from Bitcoin’s monetary policy. Bitcoin has an inbuilt scarcity mechanism.

BW: Some say the price of bitcoin has spiked sharply, a bubble soon to burst. Do you believe this? And will you continue holding on to your tokens?

TC: I hold Bitcoins not for the price to spike, but because I believe in the system and the groundbreaking technology. It has the right fundamentals. So, I will continue to hold them. The bubble talk is fiction in the heads of some media writers and mainstream bankers and economists. It’s largely driven a lack of understanding of Bitcoin.

It is important to note that the media has written that Bitcoin is a bubble since 2011 when it was 1:1 with the US dollar. Since then, articles have come out year in year out pushing the bubble line. There is no bubble. The bubble we know was caused by banks prior to 2007-2008 financial crisis.

BW: What advice would you give to someone looking to invest in crypto-currencies?

TC: First understand why you are doing so. Intrinsically, cryptocurrencies are not real investments, they are just currencies like your Rand or US dollar. The reason people are moving into them now is because their values are appreciating. So the only reason one would say US dollar and not Kwacha is because you expect that the hard currency stores value and will appreciate in value. In that sense, it becomes an investment. The difference between cryptos and government-issued currencies is that government has no control over crypto-currencies. One has to understand all these things.

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