Highlights from Finwise interview with Alex Lightman, Metaverse DNA Global Strategy Advisor and author of Brave New Unwired World
In a March 20th episode of Finwise Consensus Machine, an interview series hosted by Finwise and distributed by the Ant Node Alliance, Alex Lightman spoke about the state of the world and the economy in the wake of the COVID-19 global pandemic as well as the major trends and developments in Bitcoin and other digital assets. He also discussed at length the key innovations being designed and developed by Metaverse DNA and struck an optimistic tone when discussing the DNA project, its leadership, development team and community.
Alex Lightman is a policy analyst across a wide range of fields, including technology, political science, economics and job creation. He is the author of Brave New Unwired World: The Digital Big Bang and the Infinite Internet, a highly influential work on 4G technology. In the past Lightman served as the CTO of the United Nations’ Intergovernmental Renewable Energy Organization, and was heavily involved in the adoption of IPv6, the most recent version of the Internet Protocol. He is a co-founder of the Digital Asset Trade Association, and currently serves a Metaverse DNA’s Global Advisor.
Some highlights from Lightman’s interview can be found here, and a link to the full interview is available at the end of this article.
Q. The world economy is facing a huge crisis, with the epic plunge of crude oil prices, the fall of gold markets and Bitcoin’s price plummet of over 40% in the halving countdown season. Since March, the US stock market has triggered the circuit breaker five times. Warren Buffet has previously only experienced this once, in 1997. Do you think this economic crisis is a technical adjustment of the market, or the end of the 10 year bull run of the US stock market? In addition to the impact of the epidemic, what are the reasons for the crisis?
A. There are people gathering in America and ignoring the request to keep a social distance and ignoring requests to quarantine. So I think that Americans are going to handle the quarantine much worse than the Chinese did, and as a result our problems will last longer. Our hotel chains will go bankrupt, restaurants will go bankrupt, and it will be a big problem.
There was a question: what are the reasons for the crisis? There are reasons other than this virus, one of them is that financial assets are taking up too much space. Part of the idea of having cryptocurrency is for people to be able to send money to each other very, very easily, without a bank in the middle. So we have these organizations that have a lot of bricks, mortar, plastic and paper and so on, and they’re too expensive and they’re taking up too much of the economy. You also have the stock market which was over-inflated, you have a lot of people with algorithmic trading, and you have way too much debt. So whether there are Republicans or Democrats in the White House, they love to have big debts and deficits.
The last time we had a balanced budget or a surplus was in the last years of Bill Clinton because of the Dot Com boom. China will have a better time of all this because China has a high savings rate compared to the United States. Another reason for all this crisis, not just the virus — it would have crashed anyway without the virus — because we have so much student debt, federal debt and corporate debt. So much debt. Because we have the reserve currency people think that we can have an infinite amount of money. And you now look at what the solution is: just throwing money, creating 1.5 trillion dollars from thin air and just giving it to the banks. As of the March, there’s no reserve requirement in the banks. So banks can loan out money without having any money in their accounts. I don’t think this has ever happened before in American history, and it’s going to mean that our problems when we have to deal with them will be even worse in the future.
One of the reasons we had a surplus is that the Republicans had the Congress (led by Newt Gingrich) and they had arguments over the budget and shut down the government five times. So when you have a divided government, when you have one party controlling the House and the other party controlling the White House (for instance), that’s a divided government and that slows down the spending.
Part of the issue is that American banks sort of own themselves. The Federal Reserve is not really a part of the federal government, it’s a public-private partnership. The CDC, the Center for Disease Control is a public-private partnership. And so even though the president appoints the head of the Fed, it does it’s own thing. When Congressmen try to audit it and see the financials, they are not successful. So the Fed does what it wants to do even though it’s more like a corporation than a government agency.
In China the banks are much more tightly regulated and even owned by the government, so you don’t have the same situation here. Though there are plenty of loans in China as well. Both the United States and China are going to have a big problem from all these bad loans caused by businesses collapsing.
The reason I mention the US and China and not every other country is because; let’s say Zimbabwe has loan problems and can’t pay back its loans, the world doesn’t change. But if the United States or China or both have loan problems then the whole world will shake because of that. The whole world has a problem, because the US and China account for such a big percentage of all of the economic activity on the planet.
Q. There is an old Chinese saying: Buy gold in troubled times. Bitcoin is known as digital gold, but why is it that this time when the financial market plummeted, even gold and Bitcoin collapsed? Do you think Bitcoin’s hedging properties can withstand this test? Bitcoin’s halving is coming, what do you think the next trend of Bitcoin will be?
A. Well, I will have positive things to say about Bitcoin, and I will also talk about its limitations. The positive thing is that it was a proof-of-concept that you can have open source software, and you can have all the transactions downloadable and transparent, and you can have it so it’s not hacked. In 10 years the Bitcoin blockchain has never been successfully hacked. Yes, people have had their wallets hacked, but Bitcoin’s blockchain itself has not been hacked. That’s good.
On the negative side though, there are 18.37 million bitcoins in circulation. The mining reward for whoever came up with the win every 10 minutes to mine the next block was getting 12.5 bitcoin for that. Now, as of May of this year they’re only going to get 6.25. And because there are only going to ever be 21 million bitcoins, and because you have 18.37 in circulation, then you’re not going to have enough bitcoin going out to create enough for new people to get started, and to have a low price to be able to get to see it go up in value. When somebody has a very high price for their coin, it’s hard for beginners to get into it. It’s just too intimidating. It’s the same reason people aren’t buying Berkshire Hathaway stock.
I will say though, there have been good price movements for cryptocurrencies in the last 24 hours. What we can see is that the biggest cryptocurrencies are up, and now that people have shaken off some of the bad news and they realize that there’s not a safe haven in debt, there’s not a safe haven in equity, and the world is looking at a dollar liquidity crisis, a lot of them are moving into crypto for safety. And I think this is going to continue, because people realise that at least with respect to the American markets that they’re still trying to figure out what they’re going to do, and crypto is not necessarily dependent on that. It’s not a correlated financial vehicle. You want to have uncorrelated financial vehicles in crisis times.
Gold is correlated to oil in many cases, and because oil is plunging it’s not such a great environment for massive gold usage. And I think that crypto is more portable if people have to move from one city, or they have to make transactions electronically. I mean, what are you going to do if you’re required to stay in your house under quarantine? You can’t move your gold around, but you can move your crypto instantly and almost for free. So people are sending a hundred million dollars for 60 dollars in the cost. That’s very, very useful for the economy to have that reduction of financial friction.
So crypto, I think, will be much more commonly used by the end of this decade and this is going to be a big push for crypto. This event is bad for human health, but it’s very good for crypto.
Q. We know that you joined the Metaverse DNA team and serve as Metaverse DNA Global Advisor in 2019. What is your intention in joining this team?
A. My intention is to try to add value, and to try to help Metaverse DNA become very successful. Metaverse DNA is an excellent blockchain team, and it builds upon the core philosophy of Eric Gu, who was the first person to do an ICO in China. So he’s the original, he’s the pioneer. And the Five Components of Metaverse DNA are by far the most popular public chain solutions. Metaverse DNA has a high degree of consensus overseas, and the core technical teams of Ethereum, Graphene and Polkadot are working together on development projects. I’ve been in contact with and advised many blockchain companies, and right now I’m more optimistic about Metaverse DNA than most, if not all of them. And I’m really honored and grateful to metaverse for inviting me to be DNA Global Advisor.
Q. You mentioned in an interview that Metaverse DNA is an evolutionary edition of Bitcoin. Can you talk about the advantages of Metaverse DNA compared to Bitcoin? Is it possible for Metaverse to surpass and replace Bitcoin in the cryptocurrency field in the future?
A. Instead of saying “evolutionary edition” I would say an “evolutionary version”, but basically the core of Metaverse DNA revolves around the Five Components; and these are Performance, Interoperability, Digital Identity, Oracles and Security. It looks to me to be the most comprehensive of public chain technology solutions, and it has the basis for a complete underlying infrastructure. So far, Bitcoin is being used as electronic cash and for financial speculation, and the number of merchants that were using it has reduced in recent years, not gone up. So there used to be more people accepting it, but it just takes too long to confirm transactions. Nobody wants to wait so long for that. So I see very limited applications for Bitcoin because despite having a massive amount of publicity, probably over a billion dollars worth of publicity, nobody’s really found many uses for it. So it’s not that hard to surpass Bitcoin. I don’t know if it will be replaced, because it has such an original brand name. But Metaverse as a public chain aims to build a digital application ecology that’s connecting the real world to the public chain, and at the same time breaking the barriers to other worlds.
DNA acts as a digital asset instead of pure electronic cash in this ecology. But I think DNA is an evolutionary version of a “Bitcoin-like” blockchain, and it’s more suitable for the future ecology to basically adapt to a broad variety of applications. So the future status of how this goes depends on whether DNA, the management team, users and community can build an ecology, and I’m very confident in that because I have travelled across China, been to many cities in China with DNA, and I’ve met the people. I think the community of people who are supportive of Eric Gu and of Metaverse DNA is as strong and as enthusiastic as I’ve seen anywhere else. They’re very optimistic, very constructive and I think they can see a lot of growth.
And also, Bitcoin right now is valued at almost a thousand times more as a market cap, so Bitcoin is about $125 billion, and right now the market cap of Metaverse DNA is around $125 million (as we do this interview). So the basic idea is to surpass the growth rate in terms of the value of the coin, all Metaverse DNA has to do is be more than one thousandth of Bitcoin, and I think it’s certainly going to do that. So I think the growth rate will be bigger than Bitcoin over the foreseeable future. And yes, it can be recognized as more advanced in terms of its application.
Q. Based on your prediction, when will the golden age for Metaverse DNA be?
A. In my opinion the soaring period of DNA will be in the second half of 2020. The third and fourth quarter. In the first half of this year we’re going to be all down — everything will be down in general from the epidemic. And the global financial crisis that comes from people thinking about shutting down the economy. The overall market is in a big downward spiral. Though it was really nice today to see all the cryptos go up.
Goldman Sachs is predicting that the US economy will recover in the second half of the year, and value investment will become the mainstream. At the same time, it’s very good for crypto and we welcome the halvening of Bitcoin, taking the reward from 12.5 to 6.25 because that reduces the inflation by quite a lot. I’m very excited because what will be a big difference for Metaverse will be the launch of the Metaverse DNA mainnet. I think the value of Metaverse DNA, as I said before at 125 million currently, is underestimated and undervalued. So the first half of the year is a better time to invest and the second half of the year if it goes up, people will get rewarded for that.
To listen to the full Finwise Consensus Machine interview with Alex Lightman, in which he goes into further detail on the economic implications of Covid-19 and the role of cryptocurrency in the next decade, visit this link.
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Metaverse Dualchain Network Architecture (DNA) is a next-generation decentralized ecosystem, empowering users and enterprises with an array of features like near-instant transactions, on-chain identity, decentralized oracles and robust security.
To learn more about Metaverse DNA, visit mvsdna.com or follow DNA on Twitter at @MVSDNA.
For information on events in Vietnam follow the official Metaverse DNA Facebook page.
