Perianne Boring is the founder and president of the Chamber of Digital Commerce, a trade association representing companies investing in and innovating with blockchain-based technologies.
Its mission is to promote the acceptance and use of digital assets and blockchain technologies. When she thinks What the Future, she imagines an entirely new business world.
WTF: You have said that in the next 10 to 20 years, there won’t be a human being whose life is not impacted by blockchain and bitcoin. What do you think the top impacts might be?
Perianne Boring: Blockchain technology is reimagining the way that we conduct business and transact in a digital world. Blockchain is a value transfer protocol. It is software to send, receive and store digital assets, including your money. But it can also include your identity, the title to your car, house or really anything of value. All assets tangible or intangible can be tokenized, tracked and traced using blockchain technology. Blockchain technology will be integrated in public and private infrastructure over time. However, the consumer may not know, or they may not even need to know that the system they are using is running on a blockchain.
WTF: Google in 2019 said that it achieved quantum supremacy, or the ability to prove that its quantum computers can solve a problem in 200 seconds that would take the most powerful supercomputers 10,000 years. A big question about quantum supremacy is whether it would make bitcoin hackable. How do you see that?
Boring: Google’s computer has 54 quantum bits of power. Today, to crack the cryptography used in Bitcoin, you would need at least 1,500. So, we’re many years away from quantum computers having the power to hack the Bitcoin network. Bitcoin runs on NSA-grade cryptography and it’s highly secure. Many consider it hack-proof because the scenarios to launch an attack are not really achievable. In the 11 years that Bitcoin has been running, it has never been successfully hacked or shut down.
WTF: How much potential do you see for a mass scaling of cryptocurrencies and digital currencies where it becomes part of daily life?
Boring: It’s not a question of if, it’s a question of when. More consumers will choose to use cryptocurrencies as the on-ramps become easier to use and more accessible. Today, most of the world’s largest payment gateways like PayPal, Visa, and Square are all enabling cryptocurrencies.
WTF: What is the main regulatory hurdle to the adoption of cryptocurrencies?
Boring: The tax regime is one of the biggest barriers to the retail use of cryptocurrencies as a medium of exchange. The IRS taxes cryptocurrencies as property, subjecting it to capital gains. For this reason, bitcoin is mostly used as a store of value rather than a medium of exchange.
WTF: How does that work?
Boring: [Say]I bought one bitcoin a year ago for $8,000, and today I want to buy a cup of coffee using that bitcoin. Between the time I bought the bitcoin and the date that I want to spend it, say the market price of bitcoin went up by $12 to $8,012. Because the price of bitcoin has appreciated, I now owe capital gains on that purchase. People have to track all of their expenditures, calculate their capital gains or losses, and pay taxes on all of their purchases in cryptocurrencies. It’s unreasonable. Tax laws specifically incentivize particular behavior, and ours has really pushed cryptocurrencies to be used more as an investment vehicle than to be used for payments. This puts Americans at a disadvantage because cryptocurrencies bring many benefits to payments from cheaper transaction costs to enabling micropayments and enhanced security.
WTF: Our research shows that the average consumer knows little about bitcoin and has relatively low interest in using it. What do you think it will take to change that?
Boring: Leadership needs to come from the top. We don’t have these types of conversations in Asia. Throughout China, Korea, Singapore, etc., people know what Bitcoin and blockchain technology are and how they work. We must acknowledge that the rest of the world is moving forward with this technology and our economic and national security are at risk if we don’t take serious efforts to lead in this exciting new technological frontier. As our government leaders make clearly articulated statements about the importance of this technology and start encouraging the private sector to innovate and develop in this space, more people will become aware, get educated and join the digital revolution.
WTF: How much potential is there for multiple organizations, whether it’s governments or companies or some other affiliated group, creating their own cryptocurrencies and digital currencies?
Boring: This is something that is in play. The People’s Bank of China built a digital renminbi network on a blockchain and is expected to launch in the near term. In the meantime, the Federal Reserve says they see no need for a digital U.S. Dollar in the next five years. Over 70 percent of all central banks are interested in or already experimenting with central bank digital currency.
On the commercial side, The Libra Association, founded by Facebook and others, is building an international cryptocurrency network. J.P. Morgan is the first U.S. bank to build a digital coin representing a fiat currency on blockchain technology. There is so much innovation underway in money and payments and blockchain technology is changing how we define and use money.