A panel discussion focused on the past, present and future of digital currencies concludes the first CoinGeek Conference in 2021 that was held at Samsung Hall in Zurich, Switzerland last June 8 to 10.
The panel featured keynote speakers nChain Chief Scientist and BTC white paper author Dr. Craig S. Wright, esteemed Professor of Economics at New York University’s Stern School of Business Nouriel Roubini, former trader, risk specialist and best-selling author Nassim Nicholas Taleb, and financial cryptographer Ian Grigg. The four panelists present an enlightening—and sometimes heated—discussion about whether or not BTC can be considered a currency and what direction the world of tokenization is headed.
“BTC is not even a hedge against the risk of episodes. People say it’s an uncorrelated asset that does well while global equities are doing poorly. That’s absolutely not true. If anything, it is more volatile and pro-cyclical than traditional risky assets,” Roubini said.
Roubini is talking about BTC here; and for him, it cannot be considered a currency due to its volatile nature, and this can be seen when U.S. equity dropped in value by 35%, while BTC crashed by more than 50% and other top digital currencies plummeted by more than 65% during the start of the COVID-19 pandemic. Furthermore, cryptocurrencies have no fundamental value, no utility, no stability of store of value and no numerar for it to be a currency.
“The trouble is in the crypto space where there are thousands and thousands of different currencies and different tokens—as far as I can tell, there are 10,000 of them—and most of them are essentially created as a way of essentially saying, ‘If you want to buy my goods or if you want to buy my service, you have to use this particular token,’” Roubini added.
According to Roubini, the case of different digital currencies and tokens “is literally like going back to barter because you cannot even compare the relative price of two goods and services.” For the professor, tokenization is simply impossible. However, Wright is quick to counter that first, BSV is not a cryptocurrency, but digital cash that allows for small, instant and easy transactions at percentages of a cent, which is very different from the traditional ways of minting coins or printing money. Second, Wright clarifies that tokens are actually database entries or tokenized records of everything, such as cars and houses.
“Tokens are already there, and we’re not saying replace money and trade a car for a car. We’re saying you have a US dollar—basically, don’t even think of it as a token—you have digital cash that you exchange, that is backed by the Federal Reserve. Then you have tokenized proof of ownership of your car, and when you want to sell it, you exchange the two. It’s a very old-fashioned concept. You have goods [and] money, [then] swap,” Wright explained.
“When we tokenize all of the things in the world, we are doing it so we can account for them, move them and manage them. We’re not seeking to go back to the world of pre-barter. We’re going to keep the money on the side and still use it as money. But the ability to put all of the goods and services into a ledger and start operating them as tokens gives us some pretty good advantages in terms of efficiency and the elimination of corruption, and so on,” Grigg added.
BSV, through its enterprise blockchain that is public, scalable and secure that makes possible median transaction fees of $0.00009 for everyday use, is working to enable its token to have stability in value, unlike BTC’s highly volatile nature. This provides transparency and integrity to data that makes it more than just a payment system. This is what is meant by the statement, “Tokenization is the future of the digital world.”
“I think if you want the original Satoshi paper to succeed, what we’ve learned is that what you call digital cash must be stable cash… If you manage that, then a system for peer-to-peer transactions would have a good chance,” Taleb said.
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