Understanding Crypto Currencies, Blockchain and where the Real Potential is.
What is all the commotion about, and why are people so attracted to cryptocurrencies like Bitcoin and Ethereum. And what is an ICO or Blockchain for that matter?
First, an ICO is the abbreviation of Initial Coin Offering. It means that someone offers investors some units of a new cryptocurrency or crypto-token in exchange against cryptocurrencies like Bitcoin or Ethereum.
A Blockchain is “an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”
So how does the so called “myth” what everyone is talking about differ from the “reality.” Speculation sells newspapers, books, endless workshops and media, and they are all out there making fantastic predictions. But what is the truth, the reality and how do we prepare ourselves for the future.
I've been involved with Blockchain and Distributed Ledger technologies (DLT) for several years. I have been carrying with me for some time now the idea of
having private digital Swiss franc and have already discussed it with potential customers. At the end of last year, I decided to finally get my hands dirty and move forward.
I do not think the cryptocurrencies will replace existing currencies. Similar to the introduction of the Internet, people are still going to libraries and people are still writing on paper. It is just a certain market of participants will lose their monopoly position. There are also very different approaches to the cryptocurrencies. Not all have a quantitative limit. For example, there are currently 15,000 private digital Swiss francs, each with two decimal places.
But in reality, I think that the currency aspect of Blockchain technology is overrated. I perceive the crypto market as very irrational. And many investors are driven by greed. The potential for this technology is in my opinion elsewhere. Which is why the objective of the International Innovations Film Festival 2019 (IIFF) project and the private digital Swiss Franc is not to increase its valuation but to raise awareness. We want to test the possibilities that this new technology provides and prove the competency of small and medium Swiss business in innovation. At the IIFF we are going to test some technology-related projects that add additional non-monetary value to visitors. The festival will feature innovative approaches in movie, finance, marketing and event structure. One focus will be the adoption of Blockchain Technology and Distributed ledger technology (DLT.) I want this new technology to be used in the two areas that matter most to me. Culture and nature. I am convinced that human beings learn and grow through storytelling. Film is one vehicle to do this.
But with any disruptive innovations one must be prepared to have a paradigm shift. In concrete terms, this may mean the following for Blockchain technology: If you allow a decentralized value structure and thus give the user power over values
that are mapped to such structures, then you also give him a responsibility. Not all people can or want to deal with this responsibility. That's also because that a certain technical understanding is necessary in dealing with new technologies.
There also needs to be a set of standards. The Swisscoast GmbH is member of the commission of the Swiss Standards Association Schweizerischen Normen Verband (SNV), which works on the ISO standards for Blockchains. It is absolutely necessary and helpful to develop standards. Only in this way can we find a common language and common standards on which people, investors and the market participants can orient themselves.
I can only repeat by saying this is about Innovation. We probably overestimate the short-term and underestimate the long-term impact of this innovation. The topic is indeed very present in the media but is often not adequately treated in terms of content and understanding.
On the other hand, what I see and perceive as an entrepreneur is this: with the Internet, people have lost most of the power that we have had originally with the introduction of the internet and in my opinion, should have about their data. People give up their data control out of laziness and/or cost-cutting or just plain ignorance. They do not realize the consequences of this externalizing cost.
The companies that own large amounts of data are the new powers in many ways. They evade, to a certain extent, state structures or even influence them. Blockchain technology now enables people to clarify data ownership. I can see in the future that this technology enables “value-stream mapping.” Where we analyze the current state and design a future state for the series of events that take a product or service from its beginning through to the customer. Essentially that is both independent of government and operational structures.
If the Blockchain could be considered a "system of systems" then what I want is for you to see how each part influences and interacts with the whole. So, from this point of view it is unclear what the future holds. When I compare the hopes that is put into Blockchain technology with the long ago promises of Internet technology, I feel uncomfortable. Even then, the Internet as the new technology had promised freedom and independence. And today, we wake up in a quasi totalitarian digital and fully supervised world. I wish, and I hope that the new generation deal with the new technology Blockchain a bit more actively and critically than my generation has dealt with the internet.
To reiterate, Blockchain technology is an essential element in decentralization development. At its core, this development systematically contradicts any attempt at centralization.
We are in an early stage of this technology. And yes, Blockchain technology is still slow and hard to measure. And yes, the question arises whether the current Blockchain technology is suitable as a payment system for micro-payments, for example, or whether other use cases will not make it to the race. On the other hand, some promising projects are in the test phase, which promise to solve all these problems in the medium term.
So where will Blockchain and Cryptocurrencies be in 2 to 3 years? On a technical level I estimate that in three years' time we will technically have a more or less decentralized “proof of stake” algorithm that will solve both scaling and energy issues. Furthermore, we will have some degree of ability with the use of computer systems or software to exchange and make use of information between some blockchains. This in turn would make the whole scene more independent of centralized structures and bring also some system stabilization and consolidation in the blockchain world.
Finally, one can also mention here in the much-cited comparison; “What has the Email done to the mail and the Internet to the media, the Blockchain will do with institutional providers of trust, the so-called "trusted third parties". It will not displace the institutional providers, but its monopoly position is in danger.”
I want this new technology to be used in the two areas that matter most to me. The culture and nature. I am convinced that human beings learn a lot from stories and films. That's why I'm also very culturally involved and try to bring in my know-how and knowledge in the cultural field in different ways. That being said, this is one of the reasons why we created the 1st International Innovation Film Festival in Bern together with the private digital Swiss Franc. Come out and see what all the commotion is about!
https://innovationfilmfestival.ch/
Toni Caradonna