Hey Big Spender! McAfee, Synth, Spending Problems: Malta Summit 2018 Takeaway

John McAfee’s opening keynote at the podium in Saint George’s Bay began with a description of the poverty he witnessed in Belize. The end of the speech was a call to action. Take a look around you, he suggested. Based on the wealth of the people in the room, the potential of blockchain and the situation of global inequality, why not resolve to do something right now?

The familiar pathos of this situation, the obvious scandal to which both wealthy and poorer communities have become numb, gave force to the appeal. In the first moments of a summit about what Prime Minister Muscat called the “future of finance” it received a genuine reaction from an audience that was used to hearing the same performances and messages.

These remarks were not substantive on how the technology should be applied but McAfee would get further opportunities onstage and off to outline his position. In the youth-dominated, techie subculture of crypto, longer experience and worldly humor are all rare qualities; as are open shows of emotion. This helps to explain the 72-year old McAfee’s popularity, together with an outrageous legal controversy, “downfall and resurrection” which he and others have spoken about plenty. The tenacity he shares with SkyCoin’s Brandon Synth made the two an entertaining match for a moderated conversation the next day.

At 6:15 in this video of the keynote, a word choice underlines the specific barrier that McAfee would later reiterate onstage: that of spending.

“You have the opportunity to do something real that can change the tragic state of this world. I urge you to dig into you pockets and see what is there that you can free up to change… the state of this world.”

The choice of words implies not charity but forms of outward, real-world facing investment while still engaging with the cryptoeconomy.

The lack of ways to spend causes the wealth that has been attracted to the crypto space to be trapped inside of it as speculators merely watch prices rise and fall and conspicuously fail to “change the world” for the better.

The problem has been much remarked upon – any critic of cryptocurrency can point out that it is still mostly impossible to spend it on a day-to-day level. Remittances, currency conversion, point-of-sale machines and ATMs are all standardized services that require consistency before people will trust them. Yet the present instability keeps crypto quarantined and favors two experienced and highly motivated groups: tech-equipped traders and organized scammers.

Stability of value is one of the classic essential qualities of money and one to which many crypto projects have claimed to find a solution, without sufficient success. The discrepancy works like a cruel joke. A type of money made possible by refined technology still cannot connect to the other sections of our digitized financial systems that have infiltrated so much of everyday life.

Yet all of this other tech could be integrated with the core functionality of blockchain, which is elegant and can be used on many devices, including low cost and low energy intensive ones; the energy intensive mining of Bitcoin is a much more soluble problem than integrating decentralized currency with the gold, paper and encryption layers that the banks have built to benefit themselves.

Even a start-up that created a plan to insulate users at the “point of sale”, allowing you to buy the elusive “cup of coffee with Bitcoin” ­­­– without that cup of coffee suddenly costing immensely more before you finish drinking it – would need a really robust funding, security and compliance model. It would not have much precedent to go on. It is interesting to note that one startup making significant headway in this has roots in Indonesia, a country whose many islands have made accessing banks, ATMS, etc. a headache for citizens. Necessity then, is the mother we can reliably return to in search of inventive solutions.

To go back to Brandon Synth of SkyCoin, in discussion with McAfee and English journalist Monty Munford:

“When I started in Bitcoin it was all these libertarians. We were going to take out the Federal Reserve, get rid of central banks… You would create this money backed by mathematics, because human beings are corrupt. Then in the last two years, it became just ‘O, ICOs… money raining from the sky!’”

The financial crisis enabled Bitcoin’s elevation in value. The appearance of the added value began to distract pioneers from the anti-authoritarian plans they’d started out with. Pretty soon they were merely party animals without much personal value of their own to contribute. Yet, Synth concluded, the next financial system is most likely to be based on blockchain and distributed systems. Currency collapses in Argentina, Venezuela (and Turkey, where the previously strong Lira suffered a recent mauling) show that the current system is crooked and unstable. Necessity on the part of the populace will find a way.

Taking a step back, one fact of globalization that is inescapable has been the ubiquity of more and more complex, movements of people, casting consequences in every direction. There is now a greater chance that over the course of a lifetime a person will be strongly affected by some variety of displacement that globalization has unleashed.

If you do not undertake the journey yourself, the chances are strong that your family will be affected by loved ones embarking for long-term periods of work abroad. If you are set to enter the educated top 10% of the global population, there is a greater chance you will go abroad for some part of your study.

For people who migrate or move internally, there is a much broader scope for the meaning of regular seasonal work.   The shape of permanent peaceful migration and tourism have changed. The travails of refugees and disaster victims can be seen through this lens, as the first instruments they reach for and that assemble around them are shot through with such globalization issues.

In this post war half-century the world has been changed utterly by technology, yet there is a strong argument to be made: technology has enabled a cascade of shifts without supplying sufficient support once the consequences kick in. Abandoning new technology altogether not being a serious option, it is worth finding out what can be done to make it work beneficially. Governments’ complicity with inept and corrupt international structures has prevented the transformation of financial technology. Digital finance as it was built up from the 1980s to the present is guaranteed to copper fasten inequality.

Many would argue that community motivation is the key. For people all over, including those with the privilege of the global “top 10%” and for those ravaged by globalization, creating some better alternative starts with the determination to give it a try, and this means to be determined to expend resources in unfamiliar ways, then to find the means to make the experiment sustainable.