CNBC Interview with our Co-founder, Garrick Hileman

Dr. Garrick Hileman appeared on CNBC yesterday to talk about the Venezuaelan state-backed cryptocurrency ‘Petro’, Bitcoin, & cryptoasset valuations

On Tuesday, 21 February our Co-founder, Garrick Hileman, appeared on CNBC to discuss Venezuela’s state-backed currency ‘Petro’, Bitcoin, and cryptoasset valuations. The video can be found in the link below:

The Venezuelan Petro token sale

The Venezuelan government announced recently that it had raised over $750 million as part of the pre-sale for the Petro, their state-backed cryptocurrency. The Venezuelan government has stated that the Petro will be backed by the country’s oil supply and track its market price.

Garrick raised several questions about the Petro, such as whether the token will be redeemable for its underlying assets, what exchanges will support the Petro and how much liquidity will exist, and to what extent it would actually be decentralized. However, the very fact that a nation state is launching its own cryptocurrency on a public blockchain serves to further validate blockchain technology, and the cryptoasset industry as whole, regardless of the Venezuelan project’s tenability and uncertain prospects.

Cryptoasset volatility and legitimacy

Next Garrick was asked about how cryptoasset volatility will evolve over the next few years. Garrick argued that cryptoasset volatility is unlikely to disappear anytime soon due to the nature of many cryptocurrencies and the ongoing price discovery process. Even if governments were to continue to support blockchain technology, as nations like Japan and Venezuela have done, Garrick argues that cryptoasset volatility is unlikely to vanish.

However, some cryptoassets, called stablecoins, are looking to address this volatility problem; Garrick distinguished between two types of stablecoins — programmatic and asset-backed.

Despite the many issues with cryptoassets, such as volatility (in some cases) and regulatory uncertainty, many cryptoassets performed extraordinarily well in 2017 (20x +). However, cryptoasset valuation methodologies are still in their nascency. While it took several hundred years after the advent of joint stock companies for the development of reliable valuation techniques, such as discounted cash flow analysis, we at Mosaic are actively working on new ways to value and research cryptoassets.

As Garrick argued, the long-term potential of blockchain technology ultimately lies in several fundamental features, including its resiliency, decentralization, and programmability. Garrick expects more nations to continue to embrace blockchain technology, driving further industry growth over the coming months and years.

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