Mike Novogratz – Centralized Digital Currency is a ‘Dangerous Proposition”

Galaxy Digital CEO, Mike Novogratz has labeled the concept of central banks issuing digital currencies as a “dangerous proposition” given the volume of information users would be giving away on such a network and the control it would give governments.

Speaking in an interview with CCN’s Julia Chatterley, Novogratz used the planned Chinese cryptocurrency as an example to explain how dangerous such a tool would be and why people should prefer decentralized systems.

First, he detailed that the prevalence of WeChat and Alipay as payment networks in China and now in some countries already means that the government has access to a shared database, which could be compared to a “clearinghouse.”

“Take AI and machine-based learning and plug it into that clearinghouse and you already know a lot about a lot of people,” Mike Novogratz said.

He further explained that if governments had all the spending data in the world, they couldn’t do much with it, but adding computers to the picture means that governments have more personal data about individuals, including who is a man or a woman.

“They can shut their money off overnight,” Novogratz added, referring to the ongoing protest in Hong Kong and how people could lose their money for kicking against the government or belonging to a class of people that authorities despise.

“It’s really why we need decentralized systems,” Novogratz enthused.

Bitcoin to Become Valuable Like Gold?

In the same interview, Mike Novogratz, who predicts that Bitcoin would hit $20,000 within 18 months, discussed his view on what makes the leading cryptocurrency valuable like gold.

Bitcoin is going to be valuable because we say it is valuable [like gold with a $9 trillion market cap], but the rest of the cryptocurrencies are going to be used, and it is going to take a while for those economies to be developed

Novogratz said.

Using the Ethereum project as a case study, he explained that it could take three to five years to become a spectacular project, “but that doesn’t mean it would derive its value in the same way as Bitcoin.”

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