Blockchain, bitcoin and the intrinsic value of to…

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Money20/20 Asia 2019 kicked off proceedings in Singapore with Token Day, tackling the hype around blockchain and discussing how the technology is now being driven by real and sustainable value creation.

IBM’s head of blockchain and digital currencies Jesse Lund joined Jed McCaleb, co-founder and CEO of Stellar on The Matrix main stage to discuss the recent blockchain-based real-time global payments network rollout, which also has several banks committing to issue their own stablecoins on the platform.

Following this session, IDC’s research director James Webster attempted to provide a deep dive into blockchain in five minutes. Despite referring to himself as a “blockchain zealot”, Webster said that he understands that “skepticism is warranted,” that the technology is beyond the stage of hype and has now entered development.

The next panel session in the Technology Platform room questioned whether there is a need for private and public blockchain, with Dovey Wan, co-founder of Primitive Ventures, welcoming the “OGs of blockchain” to discuss the intrinsic value of bitcoin and other cryptocurrencies, and how you would explain this worth to your grandmother.

Jeff McDonald, co-founder of the NEM Foundation, said that “bitcoin doesn’t have much use” except from the underlying technology being used for timestamping. He went on to say that while bitcoin is “useful as a payment processing network, the value that it has is because of what it does, but this is not intrinsic value.”

Ripple’s SVP of product Asheesh Birla added that “the big idea behind blockchain is that for the first time, you can store value and send value without a counterparty. There is usually a lot of friction involved and it can sometimes take months to send value into new jurisdictions. Cryptocurrency has changed the game because counterparties are not involved.”

Max Kantelia, chief evangelist and co-founder of Zilliqa, continued this point and said that if bitcoin is thought of as a commodity, it becomes difficult to define its value. It is easy to define gold’s intrinsic value, because it is a physical, tangible object that can be made into different products, and furthermore, fiat currencies are also difficult to value.

“There is no value in permissioned ledgers. Blockchain made databases sexy again and now cryptocurrencies are being used to move assets, but nothing has been created for the world.” He then revealed that digital assets will be able to tie together all fiat currencies that exist across the world.

However, as Wan pointed out, no significant progress has been made. One transformation that has been made is Ripple’s work for enterprise clients. Birla explained that because of the “blockchain tourism” that exists today, making enterprise products for financial institutions is complex, but there are a lot of meetings between industry players about creating POCs, or proof-of-concepts, but never full-scale production.

Alongside this, moving the conversation on to the topic of ICOs, Kantelia said that while the mechanism was clever and allowed for interesting projects to raise capital very quickly, the demise of ICOs was quick and instead of being for the seller’s market, it is now for the buyer’s market.

McDonald agreed with this sentiment but said that it is unfortunate that most ICOs are scams. “A lot of people are doing quick grabs of cash and this didn’t just start with ICOs, the blockchain industry was full of scams long before. Today, with the boom of platforms like Ethereum and NEM Foundation, anyone can make tokens and scam people in that way.”

At the end of the session, Birla advocated DABs, or distributed autonomous banks, following the result of bitcoin offering ‘digital gold’, the result of Ethereum being digital contracts and Dharma providing digital loans.

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This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.


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