Currently, in the world of blockchain-based technology, business is an algorithm
As a former banking dealer and manager of investment portfolios in a pension fund, I was professionally involved in investments related to interest rate instruments, currencies and selection of the equity market assets. To identify the risks in the investment portfolio, I used macroeconomic analysis and monetary policy analysis of central banks. Currently, as the manager of clients’ portfolios in Asset Management area, who helps investors allocate funds to blockchain businesses, I also use my past experience.
As a Portolio Manager by passion, I am still keen on the monetary policy of central banks, macroeconomic problems and market regulators, whose role is extremely difficult.
The subject of Asset Management’s investments are businesses whose economies are strongly established in traditional business, which uses the latest blockchain-based technologies. Thanks to gained experience, I have a comparison regarding the functioning of the old and new approach to doing business as well as an idea of where the modern business model is heading.
Looking at the issue of portfolio management through the prism of the macroeconomic analysis, I believe that after more than 10 years, since the start of the largest crisis for almost 100 years, the world has done little to solve the problem of imbalances in the economy. The problem of imbalances, in particular case of debt, has been growing for decades. Both the officially published debt and the hidden one have grown to astronomical proportions, exceeding all limits of reason. Unfortunately, the methods used so far do not allow solving this problem. Operations of central banks in the world do slow down only certain processes, giving time to look for other solutions. Unfortunately, the debt as it was, it is and will probably remain.
However, looking at this problem through the prism of new technologies and my previous experience, I see that the problem can be solved by administrative means, using methods that were also used earlier. I believe that one of the methods aimed at reducing the disproportions between high debt and poor GDP growth rate is to update country GDP data. The update may take into account the value of emerging businesses operating in new technologies, e.g. those technologies based on the broadly understood technology of block chains. Currently, this may be quite a comic scenario but with the update of data such as CPI “statisticians” coped well in the past, through periodic changes in inflationary basket. This caused distortions in the financial markets, but it better reflected the state of the economy. So if only the will of the financial supervisors will be there, this time the problem can be solved similarly. In such a scenario, the cryptocurrency market behind which real-functioning businesses operate, must grow to such a size that it would pay off to carry out such an operation, which will probably take years, but… In any case, the country that will do it first certainly will not lose its debt valuation which is invaluable for indebted countries.
I believe that just like years ago, companies creating smartphone applications have created a product without which today it is difficult to imagine everyday functioning, so nowadays the technology of distributed ledgers takes another step forward by changing the perception of entire businesses. Blockchain-based businesses are nothing but computer programs that have the ability to create positive financial flows.
Currently, in the world of blockchain-based technology, business is an algorithm — a computer program. To many investors algotrading is a way of making investments, and similarly for a businessmen working in a blockchain field the same function is performed by a smart contract. On this basis, it can be argued that it is time to accept the fact that the automation and robotization of processes is spreading more and more into the real economy. Considering the fact that real economy has strictly defined boundaries, its development must slow down to favour those areas in which knowledge and science play a greater role, as is a systematic transition from linear thinking to non-linear one, so that traditional business going beyond the borders of real economy will continue. This area of human activity is just beginning to be explored.