The China-US trade war could benefit cryptocurrencies: Vitalik Buterin
Ethereum CEO Vitalik Buterin believes that the ongoing China-US competitiveness could help cryptocurrency thrive
The Ethereum co-founder gave his opinion on the China-US war in an interview with Morgan Beller, a partner at the venture firm NFX. The US has been in a trade war with China in recent years – a conflict that has seen both go after each other to protect their resources and technologies. According to the Ethereum creator, the battle may create a suitable environment for crypto to advance and bloom.
“It’s definitely true that a lot of the conflict, even if it’s a negative-sum for humanity overall, is good for crypto,” he said during the recorded conversation.
During his term as president, Donald Trump imposed several harsh measures against China. Trump believed that Chinese tech companies acted as Trojan horses for the Chinese Government. At one point, he tried to ban WeChat – a popular social messaging application that currently has a global user base of over 1 billion people – citing security concerns. Trump’s administration also enforced tariffs on graphics cards coming in from China.
Buterin, however, reckons that the approach from Trump’s administration is flawed. He added that US aggressiveness towards tech companies from China was jeopardising other involved actors.
“Basically, if your strategy for handling the scary things that you’re worried about in a Chinese tech company is to go after China, then you’re going to be very vulnerable to any non-Chinese tech company, or anyone […] trying to do exactly the same thing.”
The Ethereum creator isn’t convinced that the bans and tariffs protect US citizens from security threats and job losses. From his standpoint, the centralised power of governments subverts any attempts that proclaim to protect the country’s interests. He asserted that decentralisation was a better way to go about it.
“And this is where crypto comes in because decentralization is the one way that you can credibly convince people that you actually care about trying to protect people.”
He gave the classic logical example of three people in a fight. He explained that in a contest where the first person (A) is more skilled than the second one (B) who is skilled than the third (C), the latter is bound to win. The first two parties will likely try to take each other out, leaving an easy path for the third – in this case cryptocurrency.
While his logic makes sense, it does leave out several factors that could influence the outcome. First, the new administration may not share the same views as its predecessor. There could also be more than three people (actors) in the fight. These factors could potentially have an impact on the outcome of the situation.