‘Will it collapse? Nobody knows that. IT investor speaks about bitcoins, cryptocurrency and the way to explain all of this to our grandparents

In Belarus, there officially appeared a blockchain, but it is unclear in what way the companies in our country will take advantage of it. A lot was said and written about this technology, but it is not easy to explain the idea and benefit for the average person. Another well-known event of the last days was that one trade network started accepting bitcoins as payment. Onliner.by asked for comments on the blockchain and cryptocurrencies from business angel Vladimir Serzhanovich related to ConsensusLab, which implemented the project of using bitcoins to pay for goods in Belarus.
— Distributed registry, decentralized data storage… it’s all right, but how can we explain what blockchain is to grandparents?
— I’m not sure that grandparents need to know about the blockchain working principles. But it will definitely be interesting for them to know that now many healthcare projects in the world are being implemented with the help of this technology. For example, anywhere in the world, any physician can get a full access to the medical history of a person for taking emergency measures of treatment. As for polyclinics, medical cards will not be needed anymore. In addition, the patient will know what specialist is about to treat him or her before the visit and operation.
Speaking a simple language, a blockchain is a network with no central server. Each user is an equal party in the own device. Here the main difference from conventional networks lies. You don’t need a stable Internet connection, as all the necessary information is already stored in the device, it’s much faster and more convenient. In fact, this is the new Internet.
But this explanation will not work for our grandparents. Then let’s imagine a sheet of paper. Everything I write on it appears instantly on millions of other similar sheets. Even if you erase this record in 100 or 1000 devices, it will still remain in the network forever.
— Then maybe you will also explain the essence of cryptocurrencies?
— I’ll try. I’ll give a comparison, which seems to me appropriate for explaining everything very clearly. The aborigines of the Pacific islands use a multi-ton stone as money. It was marked, visually divided into segments and signed: this piece belongs to one person, and this one belongs to another. The segments were passed to each other by signing on the stone when one person paid to another. The boulder always remained in place, but this fact didn’t prevent the aborigines from using it as money. When it was decided to transport it from one island to another, the boulder was accidentally dropped into the ocean, but the aborigines continued to use it for making settlements, that is, it remained in the payment system. The same thing happens with the cryptocurrency: the owner is changed in the registry with the help of the blockchain. As a result, the payments are made promptly and without intermediaries.
What is the blockchain for?
— What will the blockchain emergence bring about? How will it be used?
— The technology has a great potential for the business and society: the financial sphere, e-government, elections, property registration, electronic auctions, logistics, business processes in companies, medicine, Internet of Things, social networks, insurance and what not.
- Is it worth expecting a large number of blockchain projects in Belarus?
— I really hope so. A lot has already being done for this at the moment, even at the state financial system level. The National Bank has created an information network, the Belarusian Currency and Stock Exchange is about to introduce a blockchain for the registry of transactions with securities. The draft decree on Hi-Tech Park being under discussion will lay foundation for the development of this technology on equal terms with such countries as Japan, Singapore, Switzerland, Denmark, and the Netherlands.
— As per the description, the perfect world, right?
— Blockchain is a technology, and it will not make the world ideal, but it can help people make it more accessible and fair without intermediaries and overpaying. Besides, the blockchain brings the future of robotics, Internet of Things and artificial intelligence closer. The technology will allow to use human and material resources more efficiently.
— — Why did you get engaged in the blockchain yourselves?
— The technology promises great prospects. Everything happening now right in front of our eyes looks like the formation of a new universe. There are new stars, planets, some of them explode, others remain for long. This is a period of breakthrough ideas and discoveries, the time for romantics and blockchain gospellers.
— What about the cryptocurrency future? It is called sometimes a pyramid scheme.
— Cryptocurrency is not a pyramid! It does not have a common center, there are no persons who would give any guarantees, or those who would make any profit or would attract the adherents into the system. Cryptocurrencies have no signs of the pyramid.
People understand what this is about and they hope someone will then buy a token from them more expensively than they did. Nobody deceives anyone. Everyone understands the risks. If you want to participate, come on, please, go for it. Perhaps you will be in the black. People just buy something that they hope to resell for more money.
— You cannot resell the cryptocurrency forever.
— Now tokens are bought precisely in order to get quick money. Here there is certain greed and avarice, that’s why people think there is an element of the pyramid. Will it collapse? Nobody knows this. But there is always this probability. Cryptocurrencies are based on the blockchain, so the society is hard with it as well.
The situation is aggravated by the fact that non-professional investors are engaged in investment. In the West, venture investment is developed, this money has become excessive. Finance rushed to the ICO [analogous to IPO: public offering of “shares” of the company in the form of tokens. — Onliner.by noted]. Here ICO can be a bubble analogous to the 2000 dot-com. If you are not a professional, better not invest there.
About mining and USD 32 mln stolen
— Is it too late for mining or still not?
— I have been often asked about this, but I cannot give advices, it is everyone’s personal responsibility. I never recommended spending last money on an expensive video card and mining at home. Mining is a kind of business; it requires investment, professional knowledge and understanding of the processes involved.
In terms of the ecosystem, this is probably not bad: people have studied the issue, figured out the detailed peculiarities, but here good investment and technical support are needed, plus cheap electric power is desirable. High profitability is a temporary phenomenon.
— — Last week, almost USD 32 million was withdrawn from the wallet of Ethereum cryptocurrency. Then what about the invulnerable blockchain?
— Here is nothing about the blockchain; hackers found some vulnerability in the wallet itself. There was found an error in the service of the smart contract, which had created the wallet. The hackers took advantage of this and withdrew about USD 32 million. This does not discredit the reliability of the system. Each problem makes the technology better: they found a mistake, so they fixed it, and like this time after time. Every problem found makes the project stronger.
— But USD 32 million is gone…
— These are the risks. When working with cryptocurrency, you need to be prepared for everything. Here you can both lose USD 30 million and earn USD 100 million. There will be a multiple number dramatic events more in this market until the legal status of the cryptocurrency, ICO and smart contracts is determined. Nevertheless every problem will advance the technology and make the blockchain better.
— Bitcoin began to be accepted in Belarus now, albeit under certain conditions. Why do not they use a similar model in other countries?
— Nowadays, bitcoin has free circulation in Japan, Singapore, USA, UK, Canada, China, Switzerland, Denmark, Bulgaria, Czech Republic and many other countries. For example, one brand of fast food in Russia is preparing to work with the cryptocurrency actively; they are waiting for the emergence of a legislative base. Now everything is at your own risk: there is no one who can find the guilty party in a controversial situation. Let’s say, you ate a burger and got intoxicated…you cannot file a claim for having been sold a bad-quality product [cryptocurrency in most countries is not considered a means of payment, that is, a slip for a similar form of payment will not be given to you. –Onliner.by noted]. The implementation of such a scheme in Belarus is built at the moment on trust. After all, companies appreciate their customers.
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Vladimir said ConsensusLab to start the first hub in Belarus for the implementation of projects and ideas based on the blockchain on August 1st: “We will provide the teams with the opportunity to work, communicate, participate in theme meetings for free and receive mentoring support in financial and legal areas.” This can encourage novice developers to create projects with this technology. It is just needed only to find a really useful application for it.
via Onliner.by
