Last Cape Town Tour (IV). Today: Cryptocurrencies

Transcription

1 Last Cape Town Tour (IV). Today:, A new money model for the future? Or just an experiment? 6Dec2017 1

2 Cape Town Picnic (IV): New Industry model Version 4.0 Manufacturing: Basic goods / advanced Chemicals and Pharma Mining and Extractive Industries Transportation and Logistics Warehousing Again, as the machines and petroleum revolutionized the world almost a century ago, the new digital emergent technologies are transforming the society through a new industrial version 4.0 At least 20 grand economic sectors or industries will be affected We are building a new prototype version of our humanity. It is natural to think to change the actual currency system. Real Estate and Infrastructure Construction Entertainment and Recreation Agriculture and Food Security Hospitality Oil & Gas ICT Media Trade-Retail and Wholesale Financial Services Utilities Healthcare Education Government Professional Services Personal & Local Services 2

3 Cape Town Picnic (IV): New Industry model Version 4.0 The transformation of the industries is happening because we have understood the importance of data analysis. Digital technologies and other innovative emerging technologies give us DATA. Plenty of DATA. Data to be gathered, segmented, analyzed. Decision making based on data, is faster, is more flexible and more efficient. Produce higher quality goods and reduced costs 3

4 The context of emerging cryptocurrencies New Industrial Version 4.0 of our Society Big Data Artificial Intelligence (AI) Automation and Robots Simulation IoT and IIoT Cybersecurity Fintech Augmented Reality Digital Analytics Etc, etc., etc For more technologies visit Gartner.com New Technology Innovations New Mindset New Currency Innovations New Digital Skills Enabling digital education Enabling digital workers Digital Capital deepening Digital Employment E-commerce Transactions Wallet Payments Exchanges Mining-Securing ledgers 4

5 Why do cryptocurrencies have emerged? are the result of a combination of multiple achievements in various disciplines that include, but are not limited to computer science (P2P networking), cryptography (cryptographic hash functions, digital signatures) and economics (game theory). There is no central authority that governs the system; instead the rules governing the system (e.g., defining what constitutes a valid transaction, specifying the total supply of the digital token and its issuance scheme, etc.) are enforced by all network participants (also called nodes ). Anybody is free to join and leave the system at any time, and there are no identities attached to users. There are more than 1337 cryptocurrencies, being Bitcoin the Bitcoin remains the dominant cryptocurrency in terms of market capitalization, Source: most important one 2017 Global Cryptocurrency Benchmarking Study. 5

6 Blockchain is the base for The entire transaction history can be independently verified by each node as everyone has a copy of the shared ledger. Source: Aswath Damodaran, Finance Professor NYU. The Crypto Currency Debate: Future of Money or Speculative Hype?. August 2017 This shared ledger, generally taking the form of a chain of blocks comprised of transactions ( block chain ), is constantly updated via a process called mining, through which new units of the native token (i.e., the cryptocurrency) are created. 6

7 Bitcoin value (December 8 th, 2017) As of Dec 8, 2017 Price: $

8 What the experts say about cryptocurrencies? Aswath Damodaran, Professor of Finance at the Stern School of Business at NYU. Crypto currencies, with bitcoin and ether leading the pack, have succeeded in financial markets by attracting investors, and in the public discourse by garnering attention, but they have not succeeded (yet) as currencies. I believe that there will be one or more digital currencies competing with fiat currencies for transactions, sooner rather than later, but I am hard pressed to find a winner on the current list, right now, but that could change if the proponents and designers of one of the currencies starts thinking less about it as a speculative asset and more as a transaction medium, and acting accordingly. If that does not happen, we will have to wait for a fresh entrant and the most enduring part of this phase in markets may be the block chain and not the currencies themselves. 8

9 What the experts say about cryptocurrencies? Joseph Stiglitz, Columbia University, Nobel Laureate. Nobel Prize-winning economist Joseph Stiglitz said bitcoin is successful only because of its potential for circumvention, lack of oversight. So it seems to me it ought to be outlawed. It doesn t serve any socially useful function. It s a bubble that s going to give a lot of people a lot of exciting times as it rides up and then goes down. 9

10 What the experts say about cryptocurrencies? Robert Shiller, Sterling Professor of Economics, Yale University and Nobel Laureate Bitcoin is the best example today of a speculative bubble, at least as I define a bubble. But the Bitcoin events clearly fit this definition, in 2013 in the original flush of excitement for Bitcoin, and then, after a temporary collapse in Bitcoin value, again now in The 2013 rise in value of Bitcoin was driven by some basic stories that have great resonance: a new currency that lives in cyberspace without government interference or control. It appeals to independentminded young people who find government regulations boring and intrusive. In 2017, the second rise in Bitcoin appears to have something to do with the appearance of ICOs, initial coin offerings, which give Bitcoin an investment banking patina too. 10

11 What the experts say about cryptocurrencies? Professor Shiller defined a Bubble in his book Irrational Exuberance in 2005, as a situation in which news of price increases spurs investor enthusiasm, which spreads by psychological contagion from person to person, in the process amplifying stories that might justify the price increases, and bringing in a larger and larger class of investors who, despite doubts about the real value of an investment, are drawn to it partly by envy of others' successes and partly through a gamblers' excitement. 11

12 My personal opinion about. It is a nice try. I see bitcoin as the first currency prototype after Satoshi Nakamoto's discovery in the year Bitcoin is one in between 1337 other initiatives. Money is about trust and faith : If there is no trust in Bitcoin or other cryptocurrencies, we are still in the stage of testing and building a digital currency prototype. I see it as an innovative experiment. There is a curious motivation to find a new currency based in the new technological platforms and advancements. If we have not invested in bitcoin or other cryptocurrency, I don t see the point to worry about something which is not going to affect us directly. In addition, the cryptocurrencies have not been tested by any government, neither accepted by the global financial sector yet. There is a lot to learn in the process to create a digital currency. If one cryptocurrency will be accepted by the financial services sector, there is a lot to learn more. New analytical tools and surgical automation can be used to take the fight to fraudsters and be more efficient with anti money laundry measures. Personally I will be cautious to accept a new currency that is not a diamond yet. It needs to be polished. And it is not regulated. I do not want the Grinch to steal our Christmas. 12

13 Thank you! are a nice try. Personally I will be cautious to accept a new currency that is not a diamond yet. It is still a work in progress and needs to be polished. It is not regulated neither accepted by the global financial industry. I do not want the Grinch to steal our Christmas. Eleonora Escalante 13