“Governments are potentially having long term issues with debt repayment and the world is suffering so much debt. Maybe the world needs an alternative — in the sense that [bitcoin] is an asset-backed currency with limited supply,” he told CNBC’s “Capital Connection” on Tuesday.
Preiss said he believes the technology backing bitcoin has the potential to go beyond financial markets, into a new social structure, with the fourth industrial revolution and developments in artificial intelligence.
With the rise of populism, he said, it is evident that trust is becoming less prevalent in society globally. As the current social contract appears to fray at the seams, a network-based decentralized system, such as bitcoin, has increasing potential.
Bitcoin is already occupying a considerable position in global financial markets according to Preiss. “Bitcoin’s market capitalization overtook Deutsche Bank just as of last week, so that shows you how to some extent the world and things are changing,” he said.
While Japan recently legalized the cryptocurrency for retail transactions, which was one of the reasons cited behind its surge to an all-time high last week, other countries remain skeptical. China’s central bank has cracked down on its domestic bitcoin market and has warned against risks and volatility.
The demand for cryptocurrency in this month’s Wannacry ransomware attack further raised skepticism about investing in it as a mainstream security.
Preiss said concerns about the use of bitcoin in illegal activities are valid, but he compared it to the U.S. dollar to explain how not all cryptocurrency is bad. The dollar is the most common medium for criminal transactions, but it wouldn’t make sense to shun that currency, he said.
Moreover, Preiss said bitcoin transactions are actually traceable because of the publicly-viewable blockchain technology on which it runs.
“The question that always comes is: Is it a currency?” he said. “Well that’s maybe too limiting — it’s much more than that, it’s actually a token. It’s distributed trust and distributed consensus.”