A group of tech experts has written to U.S. lawmakers warning them of the dangers of cryptocurrencies in an attempt to tackle the perceived influence of the blockchain lobby.
Over 26 leading computer scientists including Harvard professor Bruce Schneier and lead engineer at Google Cloud Kelsey Hightower, who was a former Microsoft engineer, have criticized blockchain technology and called for its rejection by the government.
Blockchain ‘not secure’ say ‘experts’
“The claims that the blockchain advocates make are not true,” Schneier said. “It’s not secure, it’s not decentralized. Any system where you forget your password and you lose your life savings is not a safe system.”
Schneier’s claims may strike a profound chord amongst the lawmakers in light of the recent TerraUSD (UST) de-pegging and series of exploits in decentralized finance (DeFi) protocols.
A 2017 study from Chainalysis revealed that between 2.78 million and 3.79 million bitcoins have been lost because of lost private keys.
The efforts of the academics mark the first concerted attempt to respond to rising cryptocurrency adoption through lobbying. In the past, critics have made one-off vocal warnings on the dangers of cryptocurrencies.
“We urge you to resist pressure from digital asset industry financiers, lobbyists, and boosters to create a regulatory safe haven for these risky, flawed, and unproven digital financial instruments,” the letter read.
The letter seeks to garner the support of both parties and was addressed to Majority and Minority Leaders in the House.
They argue that the computational power used by cryptocurrencies is huge and can be done in a “centralized way with a $100 computer.”
“We’re essentially wasting millions of dollars worth of equipment because we’ve decided that we don’t trust the banking system,” said ex-Microsoft engineer, Miguel de Icaza.
Lobbying intensified in last 12 months
Crypto firms have intensified their lobbying efforts in the last 12 months, drawing Washington’s key figures to their corner. A study of the U.S. Congressional Lobbying Disclosure database carried out by Public Citizen indicated that lobbying groups for the crypto industry doubled in size between 2018 and 2021.
The funds spent by the lobbyist groups quadrupled to nearly $10 million within the said period. Coinbase, FTX, and other leading firms in the space have spearheaded lobbyist efforts and with the election season approaching, more funds could be spent.
FTX CEO Sam Bankman-Fried said he could donate up to $1 billion to the 2024 election campaign.
“We’re counter lobbying, that’s what this letter is about,” said one signatory. “The crypto industry has its people, they say what they want to the politicians.”
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