Will crypto and blockchain shape the future of finance? Experts answer

This is part two of a multi-part series on blockchain and crypto in China. Read the first part about the digital yuan Here.

When Satoshi Nakamoto launched the White Paper on Bitcoin (BTC) over a decade ago, it was hard to imagine the role the cryptocurrency sector would play in global finance. Some argue that the invention of blockchain technology is akin to the revolution sparked by the invention of the internet in the 1980s. Bitcoin started out as a niche area for tech enthusiasts and has grown into a serious player in finance in just 12 years. Market capitalization is approaching Google, one of the world’s largest tech giants.

Connected: Did Bitcoin Prove to be a Reliable Store of Value in 2020? Experts answer

One of the reasons people’s growing popularity and interest in crypto is due to the fact that the technology that forms the backbone of cryptocurrency holds the promise of greater financial inclusion compared to legacy funding. This is especially important for developing and emerging economies with rapidly growing economic potential – the regions with the most promising potential for mass crypto adoption. And while blockchain cannot solve all of society’s problems, it is the community behind this industry that should address the factors that cause financial exclusion. The crypto industry is decentralized in its origins and is driven by the community. Indeed, she places great emphasis on diversity and inclusion, including evaluating the contributions of women and the LBGTQ + community.

Connected: Women, decentralization and the global economic drive: experts answer

The general public discourse on the crypto space is still suffering from the infamous reputation of the Silk Road saga and the 2017 ICO craze – 80% of the initial coin offerings were scams. By appealing to the younger generations who will soon be the main drivers of the global economy, crypto is sure to gain momentum. Just last year, PayPal, the world’s largest payment processor, announced that its customers could buy, sell, and hold cryptocurrencies. The demand for this service was higher than expected by the company.

Connected: Will PayPal’s crypto integration deliver crypto to the masses? Experts answer

Also last year, the world saw the rise of the decentralized financial industry, and some even argue that DeFi will complete what Bitcoin started in what turns out to be “a guarantee for a better, more liberated future.” DeFi has become a symptom of the real shift from centralized to decentralized services, resulting in massive innovation and growth in Web 3.0 protocols and demand for decentralized Internet. Since the old financial system has rotten and degenerated, governments around the world have seen an unprecedented amount of money printing amid the COVID-19 pandemic. DeFi offers the prospect of a paradigm shift that promises not only the democratization of money but also the democratization of finances and a seismic shift in the way people will bank in the future.

Connected: How has the COVID-19 pandemic affected the crypto space? Experts answer

Due to its decentralized nature, the crypto industry is not and will not remain a local trend – the changes it is causing in the financial landscape are global. Given that central bank digital currencies or CBDCs are being studied by governments around the world and more institutional players like MicroStrategy, Mastercard, the Bank of New York Mellon, Tesla and many others, it seems inevitable that the global economy needs this crypto accept, and the technology behind it is here to stay. These examples also clearly show signs that the industry is maturing.

Connected: Tesla, Bitcoin and the Crypto Room: The Musk Show Continues? Experts answer

Not all countries now treat crypto equally: India has had a difficult relationship with the crypto space for some time; China is a leader in CBDC development. The European Commission has proposed its regulation on markets in crypto assets, which raises concerns in the crypto industry. and in the United States, with the crypto room hoping for new appointments to the administration of President Joe Biden, regulators are tightening their belts on crypto users. Cointelegraph has decided to ask experts from China in the blockchain and crypto space for their opinion on the following question: What role will emerging technologies like Blockchain, Crypto and DeFi play in shaping the future of finance in the world in general, and in China in particular?

Bobby Lee, Founder and CEO of Ballet:

“I think blockchain and crypto have transformed finances around the world by essentially introducing a brand new asset class. Traditionally the world only had gold and silver. Then we had the invention of paper money, which became currency, and that was a new asset class. And then after a few hundred years the invention of stocks. A company’s shares became the concept of ownership of the company, making shares an asset class. And of course we had loans and bonds. Whether it’s government or corporate bonds, this is another asset class.

And what we’ve been seeing with crypto for the past 12 years is that we have bitcoin and now we have a new asset class called digital currency. Now it’s called digital currency, but it really doesn’t have to be used like currency. It should be treated like a new asset class. But why do we need this new asset class?

The problem with paper currency is that those in power always want to change the rules in order to strengthen and maintain their power over the economy and thus over the people. So you introduce the concept of unlimited printing. And this wasn’t introduced until 1971. We are now on the 50th anniversary of this new type of asset class that has a new function: unlimited printing. Fifty years ago, the US dollar did not have unlimited pressure because it was backed by gold. So you couldn’t print indefinitely, but now you can print a little because you’ve disconnected from gold. The fiat currency has changed.

And now, because of its change, the locomotive of the world has introduced a new asset class called Bitcoin, which is designed to offset the change in fiat currency – to give people and give the world a choice. Do you want to keep using an asset class that continues to print indefinitely? Or would you prefer to value your savings in an asset class with a strict upper limit of 21 million units? That brings crypto to the world.

Important questions are: Who will win? Who is right? Who is wrong I think crypto will win because of its limited edition which is strictly limited in nature. My thoughts on Bitcoin as an asset class can be read in my book Bitcoin’s Promise: The Future Of Money And How It Can Work For You. Cryptocurrency brings the idea of ​​a new asset class to the world. And it also brings balance back to the world because before Bitcoin, the main form of money was the government issued currency we call fiat currency, and crypto has changed the nature of the currency. “

Chang Jia, founder of Bytom and 8btc:

“First of all, the digital yuan mentioned in the first article, which integrates the latest blockchain technology and cryptography technology, has started deploying in several prime cities in China. You could say that DCEP is already serving the economy and people’s livelihoods. The prototype of the future Chinese financial network is gradually emerging. In terms of digital finance, China therefore holds a leading position worldwide.

For the world, blockchain technology has an important role to play in the future, including promoting the internationalization of currencies, the globalization of trade, and better structure of the financial system at the highest level in the world to avoid a financial crisis from occurring again.

Currently, we can see that Bitcoin, created through blockchain technology, is becoming the preferred hedging tool for mainstream funding, reaching a market value of $ 1 trillion in a short decade.

During the long process of financial development, Bitcoin and other high quality cryptocurrencies will bring a new logical switch and asset portfolio from the nature of currency and finance to the world. “

Da Hongfei, Founder of Neo, Founder and CEO of Onchain:

“The ongoing DeFi boom has proven that blockchain technology will stay here. In my view, dissatisfaction with traditional financial institutions is growing, while DeFi is booming due to its ability to provide unparalleled returns, efficiency, and transparency to people – ordinary people with diverse blockchain experiences.

I believe blockchain technologies in China and around the world will play a key role in paving the way for the smart economy of the future as more people – and institutions – invest in them.

In the future, I believe that flexible governance will be the key to promoting the sustainable development of blockchain by giving platforms and communities the ability to flexibly and quickly adapt to the needs and regulations of the digital economy market in different countries. “

Daniel Lv, co-founder of Nervos:

“China has its own vision for the use of the technology: it wants to use blockchain to improve data exchange, streamline business processes, reduce operating costs, and put in place better credit systems to solve common problems in financing small and medium-sized businesses – risk control from banks, legal supervision, etc.

Globally, crypto and DeFi will make financial services fairer, especially for people – like the non-banks – who have overlooked traditional financial institutions. We will also see blockchain technology continue to grow and eventually become as ubiquitous as the internet – adopted by every industry for many different purposes. “

Discus Fish, Co-Founders of F2Pool and Cobo:

“Lately everyone has been listening closely to the movement of retail investors against Wall Street financial institutions on the R / Wallstreetbets subreddit. As a representative of the securities platforms, Robin Hood could restrict retail and even force users to sell. This again makes it clear to us how important decentralized financing is. In less developed and developed areas there are more and more people who need decentralized financing.

Last year, with the rapid development of new blockchain technology – represented by DeFi – financial decentralization became more than just a dream. It can provide financial services to people in less developed areas and enable people around the world to experience more transparent and fairer financial products and services. People can choose financial services providers based on their demand for financial products and enjoy a variety of truly decentralized and rich financial ecologies.

The impact of blockchain technology on traditional finance will be greater than the impact of current financial technology on the banking industry. It will also force reform of the entire financial industry and is expected to redistribute the pattern of the sector. “

Kevin Chou, Co-Founder and CEO of Rally:

“Crypto is starting to replace obsolete aspects of traditional finance, but it is also bringing entirely new functionality to the sector. We are already seeing crypto replacing aging parts of the traditional financial system, from US-Mexico crypto transfers that significantly reduce costs to Ethereum loan protocols that do not require a counterparty.

In addition, with the advent of crypto and blockchain, we are seeing entirely new financial instruments that didn’t exist before. One example is social tokens that influencers can use to monetize their brand and take away their communities. Improving the economics between creators and fans can be key to providing household support income to millions of creators around the world.

All of these developments are particularly important in regions like China and Greater Asia. If crypto companies can handle the regulatory restrictions in these regions, it could be life changing for millions of people. “

Kevin Shao, Co-Founder of Bitrise Capital:

“Blockchain is a technological change without limits. Every country in the world should embrace the advent of new technologies. Both the West and China should actively take up new technologies and apply them to our society.

Blockchain has played an innovative role in certain areas such as government administration, social credit investigation, product traceability, and information authentication. In these areas, we believe that the West and China are very important.

At the same time, we are also investigating the development of blockchain in the financial sector. Of course, finance is more important in the system compared to other industries. Therefore, the application of blockchain in the financial sector, be it in the West or in China, should be extremely careful. “

Yat Siu, Chairman and Co-Founder of Animoca Brands:

“DeFi will be shaping finances in incredibly fundamental ways. Perhaps the greatest path (even in China) is financial literacy. By that I mean a general knowledge and understanding of finance that has traditionally been limited to an elite business class.

We and many others in the decentralized movement are building a future where our kids will be financially savvy early in college, with their own investment portfolios and a strong base of financial awareness. Perhaps, thanks to the knowledge they acquire by participating in the decentralized ecosystem, these children can even pay for their own education.

Imagine a world where financial inclusion is not just about having a bank account, but simply and effectively participating in various capital opportunities, taking advantage of things like equity investments, income farming or exchange rates, or simply investing in a project, that you like.

Financial literacy is one of the few things that haven’t generally improved with the rise of Web 1.0 and 2.0. The rise of the blockchain changes that. “

Several respondents were featured in China’s Cointelegraph Top 100 Notable People on the Blockchain of 2020. Cointelegraph China contributed to four interviews.

These quotes have been edited and compressed.

The views, thoughts and opinions expressed are the sole rights of the authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain any investment recommendations or recommendations. Every step of investing and trading involves risk, and readers should do their own research in making their decision.