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In an exclusive interaction with Your storyNicolas Cary of Blockchain.com is a convincing case for the use of cryptographic resources and underlines their importance for a financially secure future without transparency problems.
Nicolas Cary co-founded Blockchain.com in 2011 with Peter Smith and Ben Reeves. They raised $ 70 million for the cryptocurrency portfolio and blockchain solution companies from major investors such as Google Ventures, Lakestar and Lightspeed Venture Partners, and Blockchain.com currently serves 30 million people around the world who use it to exchange cryptocurrency. Even billionaire Richard Branson is an investor in the US-British society.
In a conversation with Your storyNicolas describes how cryptocurrencies work and explains why blockchain and cryptocurrency are the future.
Modified extracts from the interview:
YourStory: Why did you choose to work with cryptocurrency? Take us through your journey
Nicolas Cary: We started with a simple idea. We wanted to make the cryptocurrency easy for everyone to use. When we started working on Blockchain.com, doing basic things like making a payment using cryptocurrency was complex and intimidating. Users had to download large software packages and keep a copy of the distributed database synchronized to the network.
While Bitcoin had some initial promises, it would never have taken off without a better user experience. A few years later, now we have 30 million people who rely on our portfolios to send, receive, store and exchange cryptocurrency. We raised over $ 70 million from leading investors such as Lightspeed Venture Partners, Google Ventures, Lakestar and Richard Branson. Our mission is to build an open, accessible and fair financial future, one piece of software at a time.
YS: how does cryptocurrency work?
NC: Cryptocurrencies like Bitcoin and Ethereum are based on decentralized networks which allows users to conduct transactions directly, peer-to-peer, without intermediaries to manage the exchange of information. These networks use the same pioneering technology that has made Skype a household name for telephony. Thanks to these networks, it is now possible for someone in Dubai to send money to someone in Chennai at once, without having to wait in line, pay large commissions or worry that the money will get stuck somewhere.
YS: what does "burn the coin" mean? You hear a lot of crypto miners and startups who use this term.
NC: It is a little difficult to understand this without a deep explanation of the mechanics of the cryptocurrency systems proof of work and proof-of-stake. Here is a way to think about it: the burning of coins in cryptocurrency refers to the sending of some coins to a public address from which it is never possible to spend those particular coins because the private keys of such an address are unobtainable or have been destroyed … think about how to throw away the keys of a vault.
Flaming coins have a variable applicability depending on the cryptographic network, but an advantage includes an increase in supply scarcity. For example, if you were to take half of the world's wine supply and throw it in the sink, wine prices would rise worldwide, because the supply has become drastically limited. The same economic principle can be designed programmatically in a currency reserve.
YS: As a medium of exchange, how do you determine the value of an exchange of a particular product?
NC: In order for money to be useful, it should serve as a means of exchange and reserve of value for any commodity. Cash and coins are a useful means of exchange for face-to-face transactions, but if their supply increases drastically, their purchasing power decreases, making them less valuable. Gold, on the other hand, is a historically stable value reserve; there is a fixed amount of gold in the earth's crust and it comes into circulation at a relatively constant pace. But using gold as a medium of exchange is very inconvenient. Nowadays it is almost impossible to pay someone in gold today.
The price of money is determined by the same market dynamics that determine the price of all things: supply and demand. But I would say that it is necessary to revisit the usefulness of "old" money in an increasingly digital world. This is one of the reasons why cryptocurrency is so interesting. Now we have a kind of money that inherits the transactional ease of real money, with the elemental properties of gold, that is, limited in supply and resistant to counterfeiting. This is one of the reasons why Bitcoin is called "Digital Gold"".
Dimensioning the potential cryptocurrency market is difficult. There are various methods to do this. At the moment the market capitalization is about $ 230 billion. This means that it is bigger than Twitter, Snapchat and IBM combined. Using a displacement measure, if the cryptocurrency replaces obsolete systems like Western Union and MoneyGram, its total value would exceed $ 500 billion. But the cryptocurrency will revolutionize not only international payments; it will probably feed entire Internet-based business models, e-commerce, asset issue and could start replacing cash. As the number of use cases increases, the cryptocurrency potential expands. When money becomes digital it inherits historically limiting capabilities.
YS: How is an encrypted exchange different from a central bank?
NC: A cryptographic exchange is a market in which people can buy and sell cryptographic assets. These are businesses and for-profit entities. A cryptocurrency like Bitcoin or Ethereum can be thought of as a computer program that issues assets, similar to how a central bank issues sovereign currency, except that the software directly rewards network participants to help protect and process transactions. Digital coins come into circulation on a predictable and programmatic program determined by the design of the network.
YS: How can central banks be replaced by cryptographic exchanges?
NC: Many central banks around the world are conducting research on cryptocurrencies to better understand their characteristics and how they can inform future money design. It is very likely that central banks will be encouraged to move in a digital direction, as the main research has indicated digital money can move into an economy faster than cash. Increasing monetary speed increases economies and also brings more revenue for governments. At this point, it seems more likely that cryptocurrencies will coexist with central banks. In the future, a central bank may issue a sovereign cryptographic resource, constituting a convincing value proposition that combines the trust of a central bank with the digital advantages of cryptographic resources.
YS: In global trade, a bank facilitates the exchange of information and transactions. If the cryptic world replaces a bank, which regulates global trade, prices and currency movements?
NC: Financial services are highly regulated because history has taught us some very expensive lessons on what happens when there is a lack of transparency between counterparties in economic transactions. Bad actors run off with funds, centralized services are inclined to compromise or, worse, to collusion, which will harm consumers. We trusted the banks but they collapsed from time to time. The system requires hundreds of billions of dollars from us and billions of people are completely excluded from access to basic financial instruments. This is the beauty of blockchain technology. Using math and a distributed database, we now have a way for all people to record transactions on a global data storage system that is transparent and can be used by anyone. The software is free and open source, so anyone can study how it works.
YS: What are your thoughts on the uncertainty surrounding the future of cryptographic resources in the world of finance?
NC: People now have a choice. They can choose control over their financial sovereignty. They can choose freedom. Cryptocurrency offers people from all over the world, regardless of their origin, race or gender, the key to their financial future.
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