Vays

Wall St. Veteran Tone Vays: 90% of Blockchain Companies are ‘Meaningless’

Bitcoin.com spoke with Wall Street veteran and author of the LibertyLifeTrail blog, Tone Vays, on the recent Panama Papers leak, using Bitcoin as a safe haven, and why he believes 90% of blockchain companies right now are “meaningless.”

Also read: The Need to End Bitcoin Discrimination

Tone Vays: Keep Your Private Key ‘Private’

With 10-years experience on Wall Street in the field of Risk Analysis and Trading, Vays is now fully committed to the Bitcoin space as an opinionated blogger, trader and a frequent speaker at Bitcoin related conferences. He is a big believer in sound economics and an advocate for personal liberty, freedom and privacy.


tone vays
Tone Vays

Bitcoin.com (BC): Do the Panama Papers undermine the efforts of the US gov’t, for example, which has been increasingly cracking down on money laundering of amounts as small as $10,000 at home, but failing to track the trillions held in offshore safe-havens?

Tone Vays (TV): What many people do not know is that the $10,000 limit for questioning a transaction was lowered to $3,000 in the Patriot Act after the 9/11 event, but that’s a topic for another day. As for undermining the effort to tax, I would say NO because law enforcers and politicians know this goes on all the time and from the papers we can see how politicians are no different than the rest when it comes to hiding money. What this leak did undermine is the pathetic efforts by Governments to enforce inefficient laws as more of our tax dollars get wasted.

The Panama papers will be used to demonize the private citizens even further.

BC: As these laundering methods used by the privileged class are exposed, how do you see it affecting the relationship between private citizens and the public-sector?

TV: I see a major global confrontation between the two classes in the near future. To me “privileged” means “politically connected,” but due to media continuously demonizing the rich, the majority of the public believes that “privileged” simply means rich people. To them a small business owner making $250,000 a year by working 60+ hours a week is the devil, but Hillary Clinton who collects millions for a few speeches at Goldman Sachs is the angel who will save the poor people.

The Panama papers will be used to demonize the private citizens even further creating more animosity between the job creators and the governments that extort them. Perhaps more politicians from countries the socialists don’t like will be named like Russia, China and Iceland (which stood up to the bank bailouts). We are already seeing a contraction in global trade as the #1 economy in the word makes it harder and harder to operate a global business, which than brings in less tax revenue forcing those governments to squeeze more taxes from what’s left. It’s a death spiral that is nearing the end for socialist leaning nations in the West.

I strongly believe it’s a person’s patriotic duty to pay the least amount of taxes they can get away with without getting arrested.

BC: How do you see the various probes by governments in the wake of the Panama Papers impacting these safe havens and privacy of individuals?

TV: Government will waste even more productive value hunting people down, putting in more laws that are hard to enforce and thus making people get even more creative about hiding their hard earned value from the government. All of this just wastes global productivity. At the moment, the US government is asking people to come clean for a softer slap on the wrist. I honestly hope the private sector fights back because I strongly believe it’s a person’s patriotic duty to pay the least amount of taxes they can get away with without getting arrested. Handing more money to those that only know how to waste it is not productive.

panama papers VaysBC: Do you think Bitcoin can give “a Swiss bank account in everyone’s pocket,” as President Obama put it?

TV: Bitcoin has been doing this for years and with every passing month, more and more people start to realize this. You just need to know how to keep your private key “private.”

BC: Is it easier to launder bitcoins or dollars today? Or does it depend on how much you have?

TV: It completely depends on how much you have and what you are using it for. You also have to keep in mind that in many money laundering cases people have too much cash and they look for ways to pay taxes on it so the money becomes clean. The Panama incident is the opposite of that where you hide money from the government. The Bitcoin ecosystem is still too small to handle either side of this on a large scale.

We have too many people like Brian Armstrong, Mike Hearn, and companies like Elliptic, Chainalisys, and the recent MIT initiative that think Bitcoin is being held back by the anonymity features.

BC: There’s a glaring conflict of interest as governments push to link identities with users’ BTC addresses (KYC and AML) on one hand, while the Bitcoin community at large is embracing the technology for its trustless and decentralized nature. How do you see this playing out?

TV: This is a major problem within the Bitcoin community itself and that is because we never hear from actual Bitcoin users. We hear people on reddit and CEO’s in the space but 98% of them (including myself) are not Bitcoin users, we are speculators. We have too many people like Brian Armstrong, Mike Hearn, and companies like Elliptic, Chainalisys, and the recent MIT initiative that think Bitcoin is being held back by the anonymity features.

These people are dead wrong and if anyone is going to be responsible for killing Bitcoin it will be this crowd. I personally do not think they will succeed, but governments do not worry me when it comes to Bitcoin. What worries me is Bitcoiners that do not understand the value of “fungibility” and why it’s 100 times more important than transactions per second. The Blockstream/Bitcoin Core team understands this well and as long they are the guardians of the code, I remain optimistic.

VaysBC: Trace Mayer stated that if just one percent of the assets in offshore tax havens went into Bitcoin, then one bitcoin would be worth 2.8 million dollars. Do you agree with that statement?

TV: It sounds very unbelievable and I have not seen the numbers nor his research. For now I will just have to take his word for it, but I honestly try not to think about bitcoins being worth millions of dollars each. I would be lying if I said “I’m not holding bitcoin to be rich,” but I would still like to see bitcoin be more than this one use-case.

BC: If governments impose their regulations such as we’ve seen with the BitLicense, do you think we will see Bitcoin companies leave these jurisdictions (e.g. ShapeShift in NY) or will users start using other cryptocurrencies, or a combination of both?

TV: I do not see other cryptocurrencies becoming popular as long as the Bitcoin Core team is able to stay the guardians of the code. Because of this view I don’t find much usefulness in a company like ShapeShift, which I actually expect be shut down by the government very soon since they are centralized. As for regulation like the BitLicense in NY, they are completely meaningless as Bitcoin’s reason for success is the fact that it is not regulate-able by words on paper, only logic in the code.

I actually expect [ShapeShift to] be shut down by the government very soon since they are centralized.

I also consider 90% of companies in the blockchain space meaningless. The only ones that matter are wallets with no KYC structure like Airbitz, Mycelium, Luxstack, and maybe a few more and a few exchanges for the free market to reach consensus on a price (and they will be irrelevant if in the future Bitcoin becomes a unit of account). Obviously the mining operations are most important and I’m happy that most of them are not located in the over-regulated West.

BC: What are your thoughts on the current battle against encryption such as we’ve seen with Apple, for example? What are the implications for an encrypted currency such as Bitcoin?

TV: I have been talking about this battle for years now and it’s nice to see companies like Apple fighting back, but they are still light years away from me trusting them with privacy considering recent history. Same goes for Google, Facebook and especially Microsoft. They are slowly realizing that users want it and it’s also cheaper for them as a company to NOT be a snitch for the US Government as it opens their systems to hackers and rouge employees. I see Bitcoin helping people understand the concept of financial privacy and perhaps they will push back at these companies to provide them similar style privacy in areas other than money.

BC: Unlike other cryptocurrencies, Bitcoin is not only the largest network but its creator is unknown. Does this give it a relative advantage in terms of being shut down by authorities?

TV: It gives it a huge advantage. Governments can be very ruthless when they are threatened. If ALL Bitcoin development ended tomorrow, the system will remain fully functional for a while. You can’t say that about any other alternative. Bitcoin was also one of the few coins where the creators and early adopters did not set out to get rich, it happened organically as most were not sure it would even work.

If ALL Bitcoin development ended tomorrow, the system will remain fully functional for a while. You can’t say that about any other alternative.

There is no place in the world where it is legal for regular people to print money so I expect all those people that wanted to be famous for starting an alternative token that had value from the start to face significant legal issues in the near future. It’s all fun and games until you get thrown in a cage. Just look at Charlie Shrem and Ross Ulbricht. I’m sure more readers feel they did nothing wrong (including myself), but those with guns don’t care about our opinions.

BC: Many have said that the open-access nature of Bitcoin can democratize money in the future. How do you interpret the term “democratization of money” and is this a pipe dream?

TV: I’m not sure how to define that term but if people are thinking this will allow everyone to have a say in what money is or to create their own money, I think it’s economically silly. So yes this means I feel the Reddit community having input of what the Bitcoin Core team needs to add to the code is not a realistic idea and should not even be considered. However, I would like to think it means you have the only and final say of what happens to your money and that’s what Bitcoin is doing right now.


Do you agree or disagree with Tone Vays’ views on Bitcoin? Let us know in the comments sections below! 


Images courtesy of Twitter, Libertylifetrail, cryptomatic.ioeconomiematin.fr

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Allen is an editor and content creator at Bitcoin.com. He has a background in journalism and economics and had his Bitcoin "Aha!" moment in 2013. He has interviewed some of the most prominent experts, entrepreneurs and thought-leaders within the cryptocurrency space. Send your leads, tips or interview requests to: allen@bitcoin.com