Team Lead of Dash Nigeria and Co-Founder of Cheetah Africa, Nathaniel Luz, shares his thoughts about digital currencies, the ability of decentralized cryptocurrencies such as Dash to empower the unbanked, and the global finance “bubble” he believes that Covid-19 pandemic has busted.
Pizza: Congratulations on your new book, Digital is the Cash! We know that you are the Team Lead, Dash Nigeria and Co-Founder, Cheetah Africa. By way of introduction, tell us more about you and what you do in the blockchain space.
Nathaniel Luz: My interest in cryptocurrency and blockchain is to promote the adoption and use of digital currencies. As a libertarian, I’m an advocate of decentralization and freedom and cryptocurrency is a way to achieve that.
I’m committed to helping Africa leapfrog and catch up with the rest of the world. Dash has offered me a platform since 2017 and that has led to several projects I’ve overseen with the latest being Digital is the Cash book.
Pizza: On the dedication page of your book, you stated “Dedicated to all in pursuit of decentralization, the separation of money and state”. Can you tell us more about what inspired that?
Nathaniel Luz: That’s a call back to the future, where we started from initially. Cryptocurrency was born out of the need for decentralization, a people-controlled-money as opposed to one controlled by the government, a central entity. The first and foremost purpose of cryptocurrency is the separation of money and state, returning back to individuals their financial liberty which the state had eroded.
Cryptocurrency was born out of a libertarian ideology. The founding figures of cryptocurrency – the cypherpunks were libertarians committed to promoting human freedom and privacy. From them came several applications enhancing freedom and privacy with cryptocurrency being the financial application.
So I dedicated ‘Digital is the Cash’ to all those still enhancing this movement of decentralization, adding the building blocks to the future we so long for – the full separation of money and state.
Pizza: In the Foreword written by Ryan Taylor, CEO, Dash Core Group, he asserts that digital currencies are the first innovation in money and “are the first currencies that are natively digital in an increasingly digital world”. Considering the evolution of money from the barter system to the fiat system, would it be right to conclude that as long as the physical world exists and transactions continue to happen outside the digital world, digital currencies will never replace the fiat system?
Nathaniel Luz: I don’t think digital currencies will ever fully replace fiat currencies. Telecommunications did not fully replace the post-office as the latter still exists but has rendered it less important.
There have been several improvements since the invention of money with the latest being digital currencies. This is however the groundbreaking innovation of money as anyone anywhere can create, send, receive digital currencies in a permissionless and decentralized way. People have come to understand that the power to create “money” isn’t possessed by the central banks alone, in fact everyone can create their own digital currencies if they so wish.
Pizza: Since the increasing adoption of digital currencies are in the digital world, do you consider the introduction of central bank digital currencies (CBDCs) a threat to the growth and adoption of bitcoin, Ethereum, Dash, and other decentralized digital currencies?
Nathaniel Luz: I think CBDCs are one of the things we’ll witness on the road to mass adoption. They do not pose a threat to decentralized cryptocurrencies as they obviously are in contrast to the founding ideological principles which are censorship resistant, permissionless, decentralization, p2p, etc.
Any “digital currency” that fails the litmus test above has also failed to be a competition or pose a threat to decentralized cryptocurrencies like Dash. If it can be shut down from a central location, it ain’t a cryptocurrency.
Pizza: In your book, you, curiously, used the phrase “network money” as a synonym for cryptocurrency. Any particular reason(s) for this classification?
Nathaniel Luz: The term network money is representative of our modus operandi. We operate as a network and that’s what makes it “network money”. New coins get issued by the network via mining in POW and staking in POS. The network is the central issuer of the currency.
Pizza: About 90 years ago, the Great Depression which lasted 10 years devastated the global economy, leading to the end of the international gold standard in the global financial system. Today, federal reserves or central banks have the ability to print money from thin air. Do you see the present Covid-19 pandemic inducing an economic depression that will similarly enable decentralized networks to create money out of thin air?
This was always going to come, the bubble was certainly going to burst. The world’s economy has been hanging on a lifeline, global debts, inflation, government bailouts, rinse and repeat. Covid-19 was simply the pin that burst the bubble.
We’re about to witness the greatest financial system reset of our life. The world’s economy will never be the same again. What is happening is a Global Financial System Reset that will make 2008 seem like a teaser.
Have a look, oil is failing with its price becoming negative for the first time, fiat currencies are failing and the economy is in a halt! Global supply chain has been disrupted, commerce is on pause mode.
However, this will mark the beginning of a new financial order, new money in the hands of new people.
Anyone can create their own digital currencies and there are thousands of coins/ tokens. What gives it value is its acceptance. Who will accept it and why will they accept it? Can it really be called money without its acceptance in exchange of goods and services? Will more people flock to crypto as their fiat currencies fail? I bet in the affirmative.
Pizza: Currently, just a little over half of the global adult population have a bank account. In your book, you stated that newborns all over the world may never even have a bank account because they may consider opening bank accounts as unnecessary formality. Now that’s a big irony, isn’t it! Could you shed some light on that?
Nathaniel Luz: People need banking services even as banks lose relevance. If banking services can be more efficiently provided by other entities what then is going to be the need for banks?
The unbanked of the world will skip the banks as we know today. They’ll not succumb to that system of multiple paperworks to carry out financial transactions. Even before they get to the legal age of banking they’ll have long been using digital currencies.
They’ll live in a world where they do not need to wait a week to get their remittances sent or received, where no one can forcefully seize their money. They’ll be in full control of their personal economy.
Pizza: Each time one comes across Dash, it sounds like with Dash anyone could just send money to anyone, anywhere, anytime in a dash. Is it really that simple?
Nathaniel Luz: In fact it’s simpler than that, with dash you can send money to anyone anywhere in the world at 1 second and $0.001 fee. Transactions are instantly settled so that means if I send you some Dash right now you’d receive it instantly and can resend to the next person without waiting for confirmations. Bitcoin was supposed to be a peer-to-peer cash but fortunately it’s become more of a store of value. With Dash remittances can be carried out in a matter of seconds. In point of sale scenarios, Dash is best suited for payments due to Instantsend and almost no fees.
Not to mention that Dash invented masternodes, X11 mining algorithm, DAO, treasury, LLMQs, and is the only proof of work coin that has been able to mitigate 51% attacks via an innovation called ChainLocks. Really, Dash has got no competition out there.
Pizza: How does Dash deal with people, especially regulators and law enforcement agencies, who have low trust for cryptocurrencies and even lower trust for privacy coins, the category of crypto Dash also falls into?
Nathaniel Luz: Dash is not a privacy coin as a normal Dash transaction is visible on the blockchain. Dash’s PrivateSend transactions are identical to bitcoin’s transactions using CoinJoin and should thus be treated the same by regulators and exchanges. This offers a full overview of the Dash PrivateSend Legal Position. I’ll also quote Ryan Taylor, CEO of Dash Core Group “to address these concerns, Dash Core Group has supported exchanges in their interactions with regulators. Through a process of education, we have been effective in explaining the technology and convincing regulators that accepting Dash poses no incremental risk compared to Bitcoin. The required processes and compliance tools for Dash are identical to those required to support Bitcoin.”
Cryptocurrency is still relatively new so there’s still a lot of education and clarifications we engage in regularly.
Pizza: Finally, if you are Laszlo Hanyecz, the man who paid 10,000 bitcoins for two pizzas in May 2010, how would you honestly react when you see bitcoin price today at over $8800 per coin?
Nathaniel Luz: Bitcoin then had almost no monetary value attached to it and it was the desire of the early adopters to ensure it gains adoption. To help bitcoin gain adoption, they had to spend it. Reports have it that Laszlo made several purchases of pizzas and paid with bitcoin. Early adopters were sitting on a bet – help grow bitcoin’s adoption by spending a part of their stash or simply hold with the hope that it will someday be valuable.
To put this in perspective, bitcoin is not the first cryptocurrency to be created. Several cryptocurrencies have existed without ever reaching a sizable mass of people. And of course, people had stashes of those cryptocurrencies also, which ultimately ended up being valueless or of little value.
I also do not think he regrets his actions as I doubt early adopters held beyond a few cents/ dollars. But there’s the human aspect of wishes, but that ain’t reality.