by Pascal Marco Caversaccio — CEO Alethena

“The only good is knowledge and the only evil is ignorance.” — Socrates

As already bluntly conveyed by the well-known Greek philosopher, knowledge sets the foundation for the good — translated into economic terms — sustainable prosperity. Prosperity in turn constitutes a function hinging on a multitude of known and unknown factors, however, with a material dependence on the driving force “innovation”. One of the current fundamental driver of innovation is indubitably represented by the distributed ledger technology (e.g. blockchain) and the associated cryptocurrencies (caveat: I would strongly embrace a change of the wording to crypto-assets or blockchain-assets to get rid of the mainstream connotation associated with fiat currencies).

This decentral revolutionary movement, I call it the New Crypto World, is now butting heads with the old centralised financial world for obvious reasons. Never in the story of humankind have the privileged and governing people or institutions ceded their power to the new revolutionary forces on a voluntary basis. We are convinced that currently the overall market sentiment entails a dangerous dichotomous mindset: either we or you. However, we would like to emphasise in this article that a complementary mindset would be for the benefit of both sides and a long-term sustainable economic development can be achieved in adjuvant coexistence. It is just all about not being ignorant to new technologies!

The old financial world can learn a lot from the new decentralised world about efficient disintermediation and democratising values. The financial world is groaning about the current regulatory burdens and the entailing mid- and back-office processes. Why not build a blockchain consortium handling these processes (e.g. KYC) efficiently with low transaction costs in a semi-decentralised manner? Using a general distributed ledger technology ensures automatic high process integrity, transparency, and immutability. These factors are always pivotal to compliance officers and legal counsels. Why not bank the unbanked by building a nanopayment-system based on the blockchain technology (be reminded that one Bitcoin can be broken down into a one hundred millionth, a so-called Satoshi)? It is not the aim of this article to list the possible application spectrum, we just really want to stress that if both parties have an open mindset and work together to build new cutting-edge solutions we will achieve a win-win situation and all stakeholders will benefit in the long term.

Being an advocate of the new blockchain also demands for reflection on the current state. Many (senior) participants are mentioning the wild West in the same sentence as cryptocurrencies or Initial Coin Offerings (ICOs). Being part of the distributed world, we would support a self-regulatory market mechanism boosting long-term sustainable blockchain projects rather than a regulator with jurisdictional boundaries. We embrace the current initiatives in various countries (e.g. Japan) to set up self-regulatory bodies. Nonetheless, further self-regulatory actions — such as independent and objective ICO & post-ICO rating agencies — must be taken, bearing in mind that early to the game often requires one to create a game before others can start playing.

Eventually, sure, a blockchain may not prove to be a unique or optimal solution to all business, societal, or organisational problems. However, the span of possible applications is almost unlimited. Since the blockchain technology is still in its infancy, it is of upmost importance to promote the sustainable development of this promising technology. Let’s work together in an unprejudiced fashion and find our own, jointly crafted win-win solution.