The Importance of Playing Around with “Blockchains”
A Conversation with Austin Hubbell, CEO at Consilium Crypto
We all understand the role of financial intelligence in asset management, but how does this industry translate to the world of digital assets or cryptocurrencies? In this conversation, ICTC Research Analyst Rosina Hamoni and Consilium Crypto CEO Austin Hubbell explore the role of big data in digital asset exchange.
Rosina: To begin, do you mind telling us a bit more about Consilium Crypto, its value proposition, and your role in the company?
Austin: Consilium Crypto is a Big Data company that provides institutional grade liquidity solutions to market participants in the digital asset space, including asset managers, miners, and exchanges. Consilium analyzes 17,000 trading pairs, over 1000 individual assets, across 50+ exchanges and tracks trading activity down to the millisecond. Our data systems monitor raw transaction data as well as complete price and liquidity information from order books around the globe. These systems power the core products designed to help funds find alpha [the excess return a portfolio produces compared to a benchmark index] and place large orders efficiently in times of thin liquidity. Consilium Crypto brings the transparency and professionalism of traditional capital markets to the Digital Asset industry.
I’m one of the three co-founders who have been growing Consilium since the fall of 2017 when the company was initially started. My initial focus was on product, and I even contributed to some of the early code base for the company. Now most of my time is spent on business development, hiring, and fundraising.
Rosina: Perhaps we could dive deeper into the concept of digital assets. How would you describe digital assets to the general public and how blockchain plays a role?
Austin: The first thing I like to tell people is to consider blockchains and decentralized applications as a technology first, and an investment second, if at all. Treat these applications like a new app on your phone. Download them, play around with them, maybe spend a few dollars to try out some of the functionality but don’t just jump in before doing a bit of background research.
The second point I’d like to make is that we should be referring to blockchains in the plural, and not in the singular. There are many different kinds of blockchains, each with their own pros, cons, and nuances for their particular use case. However, what most blockchains have in common is an aspect of decentralization or the concept of removing a single point of failure/control from the system.
Unlike traditional systems like banks, blockchains maintain multiple copies of the “ledger” or list of accounts so that if any single party wanted to reverse a transaction or steal from someone, they would have to fool or hack many different copies of that list of accounts simultaneously. This makes blockchains inherently more secure and tamper resistant.
Rosina: How has the digital asset industry evolved over the last few years?
Austin: The digital asset industry has come a long way in the last few years and has seen some non-linear growth recently. Prior to the bull run of 2017, the concepts of blockchain and digital assets were relatively unknown. Since then, we’ve seen an explosion in the number of courses, books, podcasts, and all kinds of different media available for learning about the industry.
There has also been a lot of progress made in terms of regulations and standards in most developed countries, although there is still a lot of work to be done to develop a cohesive framework that can be adopted across jurisdictions.
Finally, the reputation of digital assets has changed from primarily being associated with crime and the dark web to being seen as a ground-breaking new technology that has the potential to save billions of dollars across multiple industries.
Rosina: We’ve been hearing a lot about digital assets that are backed by fiat currencies ever since Facebook announced its plan for the new currency “Libra.” Could you talk a bit about different types of digital assets and how their value is attributed and changes? Do digital assets have value based only on cash flow?
Austin: There are many different “families” of digital assets, each with their own approach to solving their problem in a decentralized way. A few examples of these “families” include Privacy Coins, Digital Currencies, Distributed Storage, and Security Tokens. I’d recommend looking into different digital asset taxonomy frameworks like Brave New Coin for more information.
In terms of valuing a digital asset, there have been many attempts at creating methodologies for measuring the fundamental value of a network or token, but in my opinion, we have yet to see a single, widely adopted approach. One idea that I find interesting is the concept of developing a unique valuation model for each “family” of digital assets. In terms of models available today, I would suggest looking into Metcalfe’s Law and NVT Ratio. In terms of pricing tokens or individual assets, the economics are driven by market forces. They are worth what someone is willing to pay for them.
Rosina: In your opinion, what are some of the key areas where blockchain technology can be used to improve legacy systems or processes?
Austin: As an industry, blockchain is still in the experimentation phase. There are active blockchain projects in almost every industry, with research and pilot projects constantly exploring new use cases. A few of the most promising areas that are applying blockchain today include digital identity solutions, tokenized assets, supply chain, data privacy and, of course, digital currencies. Keep in mind that this isn’t an exhaustive list, and there are new projects popping up every day.
Rosina: Thanks for your time today. In closing, what’s the one major thing you’d like this blog’s readership to learn or walk away with?
Austin: The world of Blockchain & Digital Assets is still nascent, and there is a lot of work to be done. There is a steady flow of new use cases for this technology being proposed, many of them totally unrelated to finance. Regardless of professional background, there is a need for more passionate individuals from all areas of expertise in the space, not just software developers. Find a course, attend a meetup, or reach out to a blockchain startup today. You never know where that path might lead you!
