While average consumers might be more than happy transacting in dollars and holding investments in gold, Apple co-founder Steve Wozniak, a mathematician by training, believes bitcoin is superior to both as a medium and store of value for one crucial reason: Its mathematically determined supply of 21 million coins makes it impossible to dilute the existing supply, making it more secure.
Wozniak shared his views on bitcoin and blockchain technology during an interview with CNBC tech correspondent Deirdre Bosa at the Money 20/20 conference in Las Vegas on Sunday. Fittingly, the theme of the conference is the future of payments, transactions and, of course, currencies.
As Bitcoin Magazine reported, Wozniak feels a currency is more “stable” when it cannot be diluted.
“There is a certain finite amount of bitcoin that can ever exist. Gold gets mined and mined and mined. Maybe there’s a finite amount of gold in the world, but Bitcoin is even more mathematical and regulated and nobody can change mathematics.”
In this sense, Wozniak described the US dollar as “kind of phony,” while describing Bitcoin as more “genuine and real.”
Woz added that supplies of gold can be diluted as humans discover more efficient ways of digging it out of Earth.
“Gold gets mined and mined and mined,” Wozniak said.
“Maybe there’s a finite amount of gold in the world, but Bitcoin is even more mathematical and regulated and nobody can change mathematics.”
Wozniak went on to compare bitcoin with owning a house: “Your house his value. And if it is a house today, 40 years from now, it still is a house in value even if the price goes up and the government draws more taxes out of it."
Wozniak @stevewoz likes bitcoin because it is based on mathematics pic.twitter.com/keanqCxf43
— Finom (@finom_company) October 22, 2017
Even before it entered mainstream consciousness, Wozniak said he “admired” bitcoin almost from the beginning. However, in the early days, setting up a special bank account to buy bitcoin was too much of a hassle. The process, he said was “so awkward, it kept me from getting early bitcoin.” When he finally did manage to buy it, the price almost immediately halved.
“I looked at it as a form of currency,” he said, adding that initially he did not understand the underlying blockchain technology but now he does.
But, Wozniak says the price was always a secondary concern. “I am not financial,” he told the crowd, adding he never followed the price of bitcoin, nor the price of Apple stock but said he was drawn to bitcoin because it was based on mathematics.
“My wife and I, we judge a hotel room more by the number on the door than what is inside the room. We are both mathematicians,” he said.
Beyond simply facilitating transactions, Wozniak believes blockchain technology has the potential to transform industries as diverse as financial services and mining.
“Right now, there is conflict with minerals in the world, and you don’t want to buy conflict minerals. Well, how do you avoid it?” He continued by explaining how companies will usually buy gold from different countries and smelt it together, so there is no way of knowing where it all comes from. With blockchain-based solutions, however, tracking where that gold comes from is now possible.
“They are applying the technology where all the payment can only go to the good, legitimate sources that don’t have conflict minerals,” he added.
With all the potential use cases popping up, it will take years for people to determine what works and what doesn’t. This is why, Wozniak says, the introduction of Ethereum is like when personal computers first hit the market and suddenly people were writing “tens of thousands of programs” nobody had ever thought of before. The dawn of smart contracts will help the technology realize its potential.
“There is a lot more to this cryptocurrency than just the Bitcoin,” he said.