Fortune magazine invited leading businessmen working with crypto currency, venture investors, bankers and other well-known professionals to the Fortune Brainstorm Tech conference in Aspen, Colorado to discuss the future of digital money. The main meeting took place at the Aspen Institute during breakfast at the round table.
Headliners of the event were:
Balaji Srinivasan, general director and co-founder of the cryptocurrency start-up 21.co., who developed from a traditional venture company.
Peter Smith, CEO and co-founder of Blockchain, a British company that owns a bitcoin purse that grew from a subsidiary of Google, Alphabet (GOOG, -1.47%) thanks to venture capital of $ 40 million.
Kathleen Breitman, executive director and co-founder of the blockсhain start-up Tezos (ICO), which raised more than $ 200 million on pre-sales and initial coin issue, with the assistance of investor Tim Draper.
The team of experts conducted an analysis of all the events that have occurred since the creation of Bitcoin and the original blockchain-technology, up to actual trends related to attracting investments in ICO crypto-currencies, the sale of Ethereum-project tokens competing with Bitcoin. The seven main predictions about what decentralized networks are expecting in the near future are presented below.
- Bitcoin and the Ethereum
Most of those who enthusiastically look at the future of the Crypto-currency have agreed that Bitcoin and the Ethereum, its competitor, will be strong, although it will probably be more aggressive to confront each other.
I’m betting that in five to ten years Bitcoin and Ethereum will be comparable to each other, Balaji Srinivasan told the audience of 70 people.
Peter Smith, in turn, noted that his company Blockchain, which used to work with Bitcoin before everyone else, was in anticipation of the prospects and even at the stage of “warming up” from the work of Ethereum.
Mike Cagney, CEO and co-founder of the financial company SoFi, noted during a speech on the main stage that his expectations about new technologies were more optimistic.
Bitcoin, he said, “is created for a specific purpose, but its attractiveness for conducting regular commercial transactions is limited to this day.” “On the other hand, the blockchain technology, Ethereum, has incredible opportunities for improving infrastructure and service solutions,” he continued, noting the likelihood of a revision of title insurance related to real estate, as one example.
- Growth of popularity of unknown crypto currency
Bitcoin and the Ethereum are still dominant, playing leading roles at this stage of digital money development. However, new ambitious participants are already stepping on their heels.
Kathleen Breitman expressed her hope that her project Tezos, will solve the problems inherent in the existing blockchains and take a worthy place among them. So, the project team works on the creation of such a software that can carry out updates automatically on the network without the controversy and disagreements that arise so often especially with Bitcoin network in recent years.
No one now can accurately say how many tokens end up, new blockchain-protocols will emerge as leaders, but it is precisely assumed that this will not be a single project.
Most likely, there will be one or two projects that are still in the shadows,” predicts Smith. “Another dominant currency will enter the arena this year or next year.
- Bankruptcies and ruins will go hand in hand with the development
Now the sales of tokens seem to be some fantastic way to quickly make a fortune, however, with a couple of interesting questions to discuss. Have they already made someone rich? Undoubtedly. Did someone lose money on this? Naturally.
Smith assumed the spread of market manipulation, insider trading in the ICO sphere.
We are still cautious in the short term,” he said of his company. “We need to exercise restraint; the reality is that each new technology will start in this way.
Brad Garlinghouse, former CEO of Yahoo, and now CEO of Ripple, expressed a simple, but different opinion on this issue:
Strictly regulated markets are not strictly controlled not just, he said. “There are scams, the perpetrators receive a prison term.
- ICO outdos Silicon Valley and Wall Street
The days when it was necessary to run for investors to find the financing of the project seems to be coming to an end. In a world where everyone can become an investor online, the location no longer matters.
“More recently, you had to come to the Valley, walk along the Sand Hill Road, communicate with people,” Srinivasan said of the standard “procedure” for finding an investor, “wanderings were brought to the western part of Palo Alto, a place that was associated with venture capital firms and funds. The appearance of the ICO has changed this.”
Now the projects are supported by Kickstarter in a similar way. Breitman noted that when the preparation for the launch of Tezos was in progress, its goal was to attract “the majority of those who wanted to contribute to the development of the project.” As a result, the company collected more than $ 200 million, and users of Tezos wallets are already more than 30 thousand.
- Regulation will become tougher
Elena Kvochko, CIO of the security department of Barclays Bank, said that they are negotiating with financial regulators about Bitcoin, blockchain and related issues. The proponents of the rules are open to new ideas until the “know your customer” law is observed, although it is too early to talk about full regulation.
“In the meantime, when governments are preparing to adopt restrictive rules, countries such as Switzerland, Singapore and Estonia are in a hurry to determine the boundaries that are suitable for technology,” Srinivasan continues. They seek to dislodge players in their region and become centers of a new financial wave.”
Breitman added that until all the rules are agreed, “it is better to remain transparent” in relation to each other.
“If you are a US citizen or businessman, then you have something to worry about,” said Smith.
- Speculations will decline
Fluctuations in the prices of crypto-currencies are a “bread” for players and speculators. But there is every reason to believe that markets will become more stable, as was the case with Bitcoin a few years ago (despite still high price fluctuations), Smith noted.
“In order for a bright future for crypto currency to come faster, you need a version of use that would exceed traditional currencies. Ideally, it should be something more than anonymous drug trafficking, “stated Jeff John Roberts, a Fortune correspondent and moderator of meeting
Srinivasan offered one such scenario:
“Imagine spending all the time in the Matrix,” he said, assuming a virtual reality in which everyone will be “woven” in the near future. “Since people from every corner of the globe will meet in it, they will need a means of exchange.” For the transaction it will not be enough to name the dollar account number. This will require an international currency. ” “It’s only a matter of time when the need for transactions” without borders “will exceed the current one in times”.
- Cryptocurrencies will influence other structures, decision-making
Whenever a buyer pays by a bank card, payment systems charge their commission.
Nicko Someren, director of technology at Linux Foundation, noted during the meeting that payment systems, such as Visa and Mastercard, overstate the amount of payment for conducting operations on the card. According to him, these companies could make them faster and cheaper.
One of the consequences of the development of alternative systems, such as Bitcoin, is the emergence of an incentive to improve the services of other companies:
“Bitcoin is good because it forces the banking industry to move towards real value for transfers.”
Smith was less optimistic about the ability of service providers to adapt:
“I don’t think that banking systems have the ability to adjust their price models.”