Is The Real Value of Bitcoin Zero? - Adriano B. Lucatelli, Descartes Finance

Transcript

[Music] hello and welcome to the blockchain and dust we're pioneers and thought leaders talked about their journey in blockchain technology crypto assets antetokounmpo [Music] if you enjoyed this podcast please give it a top rating and review on iTunes and feel free to follow me on Twitter at Manuel's dagger this episode is brought to you by christos storage crypto storage offers a proprietary solution to enable professional storage of crypto assets the storage is secure both physically and digitally on the highest grade hardware security modules with detailed configuration possibilities for

individual based access control to learn more visit www.hp.com/recycle villains shows among the top 100 Swiss bankers in 2017 adriana is an outspoken critic of Bitcoin and other cryptocurrencies and he is a co-founder and CEO of the cart finance a Swiss Robo advisor he started his career in 1994 at Credit Suisse where he held various managerial positions in Zurich and London and from 2002 to 2009 he was managing director and member of the management committee

at UBS Switzerland in Lugano and Zurich from 2012 to 2018 Adriano lectured at the University of Zurich on the political economy of international finance and now to the interview hello Adriano and thanks a lot for taking time today hi it's pleasure to be with you Adriana we met about two years ago when I made an interview series on FinTech and back then you had just started a robo advisory so what what's the progress with with that project I'm actually quite happy with with with the progress we made so far the b2c part has

disappointed to some extent because the Swiss are not so easily convinced to switch from a traditional bank to a FinTech company but our platform has proven to be quite successful for two b2b sales channel ie for corporates and I see tremendous development there we've signed first Bank so I'm quite happy thank you cool and that Rob advisory is traditional assets is not crypto as it's absolutely traditional old-style we invest in assets that actually produce something and speaking of that also in a recent talk you you spoke about the

value of Bitcoin going to zero that's that's your opinion so can you explain that a little bit yes it goes back to to a quote that that I've seen by Voltaire he alluded to fiat money to paper money and said that paper money will eventually go down to zero ie the real value on paper has no intrinsic value and I applied that to cryptocurrencies and particularly to Bitcoin and which did not make me a lot of friends but I thought it's it captures the sense of

bitcoins I today I see basically free functions of Bitcoin and for at least two I don't see any value for example if you if you consider it as an asset asset like a share a real asset then you would have to apply for example discounted cash flow methods to Bitcoin and that will eventually lead to zero if you look at it as sort of how how exactly will that math work that it goes down to zero because it has no intrinsic value you cannot really value what bitcoin is it's

not a an apartment that pays your rent it's not the share that pays your dividend it's not a bond that pays your income coupons regularly it is basically nothing it's a Bitcoin but what does it represent if you look at it as an asset then it does not have any value because all traditional methods valuation methods do not apply so the the ultimate conclusion then is it's worth nothing if you look at it as as a commodity like old then I would argue the same it it

has no value of gold at least you can use industrial II and about 10% goes into industry s base airline medicine medical items but Bitcoin cannot be used in medicine cannot be used in Airlines 404 you cannot even eat it so in the end it's that the comparison to gold what people like to do usually you see Bitcoin as a as a gold coin and ironically they say we mine bitcoins like gold but this is is fake this is not true so the metaphor is actually

misleading so if you then argue well it's not not a commodity it's not an asset so what is it the world you cannot get it's a currency that's what people say so you buy and sell and it's a supply demand like Swiss francs against dollars and and then I see some point there I still don't think currencies per se as such do have value if you look at it as a currency at least you cannot be well it's worth what people are ready to pay or willing to pay does that mean it has value no but at least you can justify a certain price it's the

equilibrium at a certain time between supply and demand so at the end looking at all three possibilities what it is this animal which nobody really understands and probably will take some more years to fully understand what did this make me come to the conclusion it is nothing then fine it will collapse and go down to zero maybe we will find a new way to look at that Bitcoin maybe we see any reason for maybe we don't even see it yet that's fine it's an experiment but what I don't like is is that we hype it and we argue it something new you not seeing here

everything that has been true in the past it's not true anymore and all that stuff I really dislike that tremendously we should look at it as something new but not throw your mind out of the window and just follow a certain hype that that's my take hype story but so just to recap you said it's not an asset it's not a commodity and it's not a currency maybe it's a currency but but I don't see it as as having some value because the Swiss franc as such doesn't

have value the Curt the exchange rate against the dollar just says you can get a certain amount of pesos against the dollar or yours against US history but but that does not imply it as any valuing that's the same that the same is true for Bitcoin you can argue well there's a guy or someone willing to pay nine thousand bucks for a Bitcoin but does it really have the value of nine thousand probably not and then people argue are well that's true for gold as well but then I say not really because if if it becomes too expensive to dig out gold people

will stop so there's a natural were for natural price tag to to an ounce of cold which is probably the cost to dig it out and put some some margin on it and if it gets too expensive then people will replace gold in the industry for something else or they will not buy gold watches they will they might buy steel watches so there is a natural price tag which makes sense which people can deduct but Bitcoin why isn't 9 why is it 10 why is it zero nobody really knows it people hold it and they're I

agree with Warren Buffett people actually just hold it in the hope that they can sell it to a dumber guy later the higher price that's not a very promising story so I'ma be critical about Bitcoin and certain cryptocurrencies but I mean the way I understand it you have the cost of something and you have to price right of course with gold I understand it's the cost of digging it up and the cost of melting it down into into a bar and all that but that's still not the price the price is what people are willing to pay above and beyond that cost way so I mean wouldn't it just be normal supply and

demand economics with these cryptocurrency it is supply and demand but that does not mean it has value it's just for take baseball cards do they have the value they go for them probably not so art is a Picasso worth 200 million maybe not maybe it's a different word for thousand bucks but that's that the value we we we give to a painting by Picasso but there you have a painting there F is history there you have limited you have one painting and if it's gone it's gone forever so it did yeah I I don't I dislike the idea

comparing the contour or to an art painting or to God I think it's simply a coat that is worth nothing some people I speak with they they say they talk about digital scarcity which for the first time introduced scarcity into digital goods so I mean what about that argument yeah that make sense but then again going back to value you know what struck me is me in February this year 2018 when the markets crashed III would have expected people moving into scarce supply assets or limited supply

assets like gold and and Bitcoin as such but guess what what has happened nothing it actually collapsed as well so the argument that it's a store of value protecting you from a crash from inflation is not true there is not no negative correlation between traditional assets like shares equities and Bitcoin something that has been true in the past between gold not not perfectly but people would rushing to God if you have some some political crisis somewhere or if if the markets get shaking and and

but but that has not been true so the argument that scarcity has has done something special to Bitcoin or to crypto currencies or crypto assets in general however you want to call it define it has not been true because scarcity has not been a factor in price parity so far you would have had to see it and the interesting thing is that what is interesting is that the former finance minister of Greece Pharaoh Farkas saw that too and he claimed that that made him come

who that that that beacon is in a bubble because he said if we weren't true them then you would have seen that negative him correlation between fiat money or real essence and and assets that have scared of limited supply so going back to traditional boring normal economics 101 and there is no real reason for Bitcoin may be another asset but then it's just something that you digitize you take this class which is pretty arena you digitize but then you have a Quran collateral behind it you have a

derivative you say ok this bitcoin 0 1 0 whatever the codisk embodies or reflects the value of a class that's fine but it's still the value of a glass so I think if you use a coin to to represent a real asset car house chairs whatever you name it computers then it makes sense then you allow something to become too scared you can actually scan certain things and you can move it across long distances because before you can now buy

your house you have to come here you have to go to the notary you have to look at the house blowed bloody block block chain or the kurta currency or the token that represents a certain part of the house can travel easily all around the globe there I see some efficiencies but it's always a real asset behind something not the token as such the token as such is worthless like a paper take that the first years of tokens have been virtues that you reduce to travel to when you travel around the globe and you you're handing your voucher and you get

you you get to room in hotel that's exactly what bitcoin is but nobody would ever value the voucher as such at 9,000 they would think you are crazy they would send you to say but but but the fact that it values a room to use for two or three nights that's the value the value that you write on the voucher that's the value the voucher the papers such as value not even one cent that's the UNAM analogy to to Bitcoin become as such it's worth noting it gets

its value by what you give it to it like the house car whatever that's what it is and there I see tremendous potential for for the financial services industry let's go back to that very quickly I mean let's say I have a dollar bill the dollar bills also just printed on paper so you could argue the dollar bill is worth nothing yeah it doesn't mean the US dollar is worth nothing the doctor is is worth nothing because we agree that it's it's worth 10 whatever francs dollars well the currency markets agree because they trade yeah but they trade certain values that we give to that paper the paper I agree the dollar bill

the Swiss franc bill is worth nothing it's about 10 what is it the new the latest 10 frank bill costs 30 rock on 30 cents so that's the value 30 cent but but we bylaw agreed it's 10 francs if we bylaw agreed that's worth nothing then probably some pay 30 cents or more because it's an old dollar bill which you will put on a wall so it's a collectible but but that's the difference but nobody has given a a certain value by law to Bitcoin if the

US decide that one Bitcoin by law is ten francs at $10 fine then it's ten dollars well but let's say the central bank of the United States also hasn't given an equivalent value in gold to the you know it doesn't it's just by law law law says this paper is ten francs it's only law it's it's it's a value that by law has been given I know it's it's difficult to understand because there's no real manual but that doesn't mean I think fiat money and Bitcoin share a lot in common it's not them against Fiat actually they are the same there were

actually nothing but if Bitcoin could get a value like what you've seen have been released recently I've been to Cuba you have the traditional national patience and you have to cook the the strong pays own basically link to foreign currencies so why the difference it's the same it's basil the same country the difference is because the cook is linked to a strong value which you can use and then buy some stuff the National basil of Cuba's worth nothing why because you can't find nothing anything and that's the same way with

Bitcoin or currencies if if you attach a certain value ie it's linked to the dollar then it gets basically the value of the gun then it gets man you not the paper not the bill the value by law and the same is true with a house if you if we digitize the house and do you issue a hundred tokens house tokens then it's not the token that has value it's 100 of the house and that's what and then the token in value should fluctuate with the value of the house like the cook fluctuates with the value of the US

dollar and that's what people should understand I i-i've noticed that a lot of people have difficulties among to understand monetary economics because they say yeah the US dollar is worth nothing so so the big coin is is yes it's the holy grail to stability no it's not it's the same well I think if everybody agrees that the US dollar is worth less than it currently is and you know let's say I want to exchange it to euros or Swiss francs then of course the value would also go down yes but isn't the same true for bitcoins still I mean Bitcoin is really a price that's made it in the market yeah yeah I understand what you say but that doesn't mean we need surprised it's not value and so

it's fiat money yeah I'm not disagreeing I'm on the same page I'm that that's what I say everything that has no intrinsic value will eventually be zero as Walter said funnily said but it's true everything that has no intrinsic value will go down to zero eventually even highly traded collectibles you see that if you go to art shows or did the trunk shows then you will find service from whatever the ceramic services might be in high demand and ten years laters you

get it for free they throw it at you so that's that that you have to look at it more as a collectible if probably at assets but you you you you yourself give a certain value to something for some Picasso's worth 200 million first for others 2,000 francs who is right no both are wrong there is no no way too to cleanly that you can price it but not value it you give your own venom because it's the same it's a pin it's a belief system but it's not a an asset that you can can based on a belief

system a staunch radition nyoro generally a great way to assess value and and that's that that's what people don't under understand they mix assets value price with everything and in the end they say but Fiat this too yes fine that doesn't make become better what's the difference so III think people should should start to get a bit more realistic about these these things and then probably we can we can get together in them and not shout each other or or criticize each other what by

the way happened to me because I said something that people don't like like a sec but but we should sit together forget all these belief systems and look for for a way to find the generally agreed when to to to value or at least this assess to understand what it is I still think nobody even me fully understands yet what bitcoin can potentially be as I see it today I would say it's not another commodity it's nothing not an asset it's a best a currency or even less collectible is it right I don't know at least I have a way

to look at it but to say it's better never tested before knew everything all this is his past it doesn't doesn't that value blah blah blah fine but that doesn't help us to get further to better understand what's going on what is happening right now around us this big experiment and every time I hear someone ah well discount the cash flow cannot really apply to it because it's something new that has never been been here before I have to laugh that just too young to remember 1999 when comm collapsed at that or the crashed crisis

happened so I remember people who are saying well you cannot you look at Amazon it's hardly making any any money yet and then the older people think eventually it will produce money but actually it doesn't so it's it's the same of bickering you financially it doesn't doesn't produce anything when you enhancing so we have to find that and we don't know yet where it is blockchain yes might be that thing that can help to make it valuable but I don't see it yet because nobody pays for the Internet

people pay for access oh for for applications based on the internet but there's no internet chair yes I mean I want to I want to ask one follow-up question about this Bitcoin will go to zero and then I will move on I mean I don't want to drill down to it but so I mean I'm not quite sure the argument is so obvious I mean to me it still isn't because if if you say Bitcoin is a belief system which I also believe then the u.s. dollar is also belief system but the US dollar has behind it a

central bank and the government which reassures people that they will somehow step in and do something if the value threatens to go towards zero right in Bitcoin and other cryptocurrencies we don't have that we have no central bank no authority coming in and saying oh yeah you know what will we'll put a safety net underneath it to to captured and and I I get all of that I totally understand it but still I think it's a strong statement to make to say well that safety net is missing therefore the value is zero well I said I I argue I wished we had we had the good I mean what when I came across

Bitcoin the first time I thought it's a nice thing you know it's it because we after the financial crisis we all knew something has to be changed this system is not stable it made many people very poor unemployed we have never basically recovered from that crash I think historically will probably never make up that loss again eventually but but many years later so we we have at least one or two lost generations at that's for sure and we

enough came across Bitcoin for the first time I thought oh that's neat it's then limited supply nobody can can devalue debase it that's like what the libertarian like Hayek and Alden and then Milton Friedman we're looking for to make the system more stable but in the end it has to be something valuable and I don't see that because I as I told you so far I have not seen that link between stability and and and crises because Bitcoin crashed during a crisis when other assets crash that should not

happen so people do not really believe what they are saying because they would storm Bitcoin in in a time when the market goes down by 5% you would expect Bitcoin to explode by 2030 percent nothing of the like has happened so people who think it could be a store value of stability do not act accordingly which goes to show that people distrust in the end Bitcoin and de rata half US dollars by the way I prefer very much miss Frank to Bitcoin and and and III probably all

stick to Swiss francs for a while but the example you just gave right after of the price explosion and then the the subsequent crash isn't that just an expression of of a free market I mean yeah but but it shouldn't be like did such unstable I think markets need stability but these markets are immature one could to put our view and they're very early and that's why you get these extreme price I mean it's all yeah I agree right but that doesn't make it better it's a fact and so and if it wants to survive if they want if Bitcoin wants to prove me wrong then it it has to grow up very quickly

because if it doesn't it will disappear for sure because then people say it was a nice fat maybe you remember to swatch collections that famous artists made a they would they won't go for a thousand two thousand francs now do you get it for 20 or 30 francs and the previous owner is happy that he can sell it at any price that can easily happen to to Bitcoin as well because these watch swatches those collections they were limited as well and yet the price basically went down to zero there's no guarantee that scarcity protects you from zero value that's my point

forget about scarcity because most of the artists or the work artist works are worth nothing they reach the highest price when they are sold for the first time more than 90% and that you can get people thing to say hey wait there's a famous artists nobody do you know if oil that that Roy Lichtenstein will be worth millions in the hundred is probably not who tells you that of the the stars today music stars will will be in will be remembered probably the Beatles maybe maybe that Elvis probably the only one of the rock

rock'n'roll history of all the groups probably the two will be remembered the Beatles and Elvis and and the same is probably nobody will remember Bitcoin in 20 50 years I want to include or add an element of humility and and relativity and not think because it's new it's cool it's gas it's anti-establishment it's anti whatever it's cool no maybe it's not cool at all and that's what I wish I I wish that that that kind of realism came

back to the discussion or to the table that we can get over all that hype and and and start to look at it fresh and and try to see the value that they could have that's what that that's actually missing and I think it's very sad because I'm not generally against Bitcoin because I want to you want to see it at zero I'm just making an analogy something that has no intrinsic value will eventually historically go down to zero dollar Swiss franc swatch collection of the collectibles at mint uni will go to sucker to zero even books written by Fidel Castro in a

hundred days nobody will ever read it again maybe I'm wrong but probably most likely I'm right and that's that was missing i I think realism humility relativism should guide the discussion and not hype great coolness know that stuff I mean you've been a lecturer of economics at the University of Zurich what if you look at price discovery of these of these crypto assets in terms of Austrian economics the good thing about the Austrian

economics or The Economist has been to focus on credit or monetary policy they realize that the current system that a monopoly in in in money printing will lead to a debasement of the currency because the leaders the elites do not have any interests to repay their debt so the easiest way to get rid of your debt is to to inflation it away and that's the biggest criticism that that know one of the biggest criticism that the Austrian economists raised I think another point is that the the monopoly

in not only printing money but in setting interest rates is is it's never correct people leave interest rates too low that will entice people to take out loans and spend it for stupid things and when interest rates go up they cannot repay their their obligations that debt and then you have a crisis what has happened and then the 2008 financial crisis so if you have a monetary system that is limited or has competition good money against money that that these things will not

not not happen but probably the extent of a crisis is much much much smaller and if you now make the connection to Bitcoin that that was the hope I think of the Austrian economists that beacon could be exactly that solution to that problem of high inflation too much debt which the current financial system or monetary system the problems that we have now and and I have great sympathy for that absolutely because many people as I said suffered from from or suffer from these crises and usually it's always the most the poorest of the

people and not the rich 10% himself from also I have great sympathy for a system that makes makes it more stable but is it gonna be pick owner I simply don't know it might be it might be another form of cryptocurrency issued by a government that has limited asset that or scarcity that the one problem I see with that is is that it has a deflationary effect and people will not spend it because they hope because it's limited they expect it to like land that the value will go up now I use the word

value and then they will not use it they will not spend it so the the money will not go to the productive Oh is not a productive resource anymore but the store of value in the hope that it will rise and then it has a tremendous deflationary impact and then it's not the currency anymore but an asset or a store of value and that's another disadvantage some I'm I'm a bit I see the point enough great sympathy for the Austrians but it's not gonna be to solution let's take a quick break for a message from our sponsors crypto storage is part of

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finance and IT security to learn more visit WWF no storage eh I see the point enough great sympathy for the Austrians but it's not gonna be the solution but isn't that argument that you just made would be an argument for the value increasing yeah it will increase but people will not spend that people will expect that I have a scare or scarce scarce resource Bitcoin and and you know that it will go up in value because other things are being inflation away

the vacuum were reduced in value like the national pesos and the cook the linked peso Cuban peso to a US dollar so that would happen that people will not use cooks will not use bitcoins because they know it will go up in value when you spend a Bitcoin it's out it's gone you don't have it another guy will then keep it and that's you the deflationary hugely deflationary and we don't have yet enough experimental experience of what deflation actually means we had the crisis in the 1930s and

there we saw what it means if governments are too tight and that could be that could be in the scare well that that's scary to me and that could happen to bacon as well I think we should be careful there are people are trying to to adjust or pick on is limited eventually it's gonna there will be whatever 121 million in circulation some artists are starting to adjust the size according to growth and of the economy so it's not gonna be

limited but it's it it grows like at the speed of the economy if the globe if if the global GDP grows by 3% and you cannot be well then let's let's have the currency circulation grow by 3% as well that could be a solution but then you have to guess what growth could be and then you are almost in in a communist system that some planners decide what it is and how much it should be that's that's another scary thing rather what used to be a libertarian idea might end

up as a very very socialist communist way to run economy economy so I you see I I have not found the right I have not find the definite the final conclusion but I know that we have to search further and that what we that all the arguments in favor of Bitcoin have not been very convincing people argue well your argument haven't been convincing either fine but at least I tried to apply common sense economics textbook economics to Bitcoin rather than hoping that it will end up as a

wish but that's probably the difficult thing about Bitcoin it has some luring then people like it we see but but maybe we're gonna be very very disappointed so we are in the face of experimentation and that's ok and and we know that we don't know and that's fine but we still have a lot to discuss and to find out and that you may little intellectual honesty will lead to the right solution not sect like arguments or killing Bitcoin slogans I think the truth is somewhere in between and and I don't

know where but I know we have to search further and to accept that we might be wrong it's certainly good idea to also criticize and then you know develop arguments pro and con I think that's that's what I think is very important I mean you said before that you got quite a lot of criticism from from Bitcoin leonardo's yeah exactly from Bitcoin fans so what exactly were the points where they criticized you that was the funny thing they weren't that they will not criticize my arguments they would just criticize me personally as an idiot I can't live with that it was I I had to get used to at first but but usually

with the with the accusation of oh we don't understand your old guard economist it's good I like to be old guard I still like the Beatles so quality survives on long terms of Bitcoin still needs to prove that it has the quality that good artists or good quality houses have and so maybe I will change my mind but but the thing is that the discussion gets easy on both sides gets easily very personal and direct and not very factual and yes I've been a victim of that but people criticized me for being against

Bitcoin but not against beacon because I hate it because I tried to argue try to try to find the way how to assess a value and Bitcoin and and if you say something that doesn't it doesn't fit your belief system then you will be criticized fine I can live live with that there are enough Bitcoin fans that with whom you can argue these before you said maybe the discussion should shift away from how great Bitcoin is or cryptocurrencies are in general more toward what they could be and what what the real vision should or could be

behind them so where do you see that that vision I I think that I think more of blockchain because again the token is just the way income like the larger I look at the technology and then I tried to think ways to make life easier more efficient safer especially in healthcare I see tremendous potential of blockchain technology to make sure that people will not buy fake medicine so what what is then the application I mean the provenance or we have provenance or small contracting yeah I think the yeah

that these are two very important and probably yet underestimated use cases for blockchain it you might have it in health care not in finance so we've tried to focus on finance me we can we stubbornly go our way towards nuts but maybe that's not the best use case in the first place there are definitely other ones I think health care is farmers is one of the biggest maybe you can also trade airline tickets easily I

think where you can make things more efficient than find direct cut out thing to me Garrett that's always a good thing always has been a good thing we've seen that with with travel agencies nobody uses travel HS in that anymore but we still travel and travel has become less expensive forward time and so I think because our blockchain just Bitcoin as a vehicle of blockchain can exactly need to that make the world safer more efficient and therefore has a menu I'm sure that's another one that many people

criticize you for where you say you separate your titles eat rice try to separate cryptocurrencies from the blockchain so but you're doing that you say it's very much possible to use just blockchain technology without an equation no I'm saying the blockchain blockchain is the vehicle it's like the voucher that moves certain values around so their token to use another word for Bitcoin to token is very much linked to blockchain but but it's not blockchain that has a value it's don't the service that it does provides to some of that that's the the point blockchain is morphing into an Internet of value

rather than the Internet of of information and and there are C value but not as such blockchain as such does not have value again like the internet doesn't have value you don't pay for the Internet you don't buy a subscription by Microsoft for a year me usage of Internet you don't do that you buy you buy something from from a telecom company that helps you to get don't mean to me yes because you you can't I mean that's an argument that many people make right in favor of token economics that say well yes on the

internet it wasn't possible because there was not this technology available where you could actually monetize these tokens but now we have tokens that can be used with blocked in chicken technologies did you did you you were just I called it differently like an ePaper so token just called differently it's this again it's just a vehicle it's it's it could be a button of what plane written Audrianna or ten bucks to whoever could be on and on a wooden piece of wood it could be a glass it could be on paper it could be on a digitized on on on a coin token so I I

think we should go back to economics what do we do we sell an ePaper we sell information over the internet rather for the QIOs on a printed form no both both is a token the paper having the information the token having deep Internet having the information you should think what what is it and for me it's it's it's a carrier nothing else and and and once people understand that and then you say okay how can I now create value using that token what can

could be the information or the asset that I move around move from me to you so that people should understand that it's nothing it's not the token talking is irrelevant it's about a digital spawn III I don't understand what people have so so much difficulties talk to get that yes it's moving nothing between the two of us doesn't create any value can move the coins both back we can create the status token on a cerium we can create

today 1 million you sent 500 thousand to me now I have half half of the circulation so do you think somebody's gonna pay $1,000 for that know why because it's no there's no venue but if we say hey the 1 million ETH ohms thank is talking that we created these are linked to my salary then make its value but it's decelerator care assessment not talking that's the that's why I created France with a friend of mine to : a token on ich none on the theorem 1 million just to show

people how ridiculous is this because I still tried to find someone who pays me a million u.s. for the million kalana tokens I haven't found anyone because why because people realize hey there's nothing beyond its field it's like dollars what did you do with that project was it more like a private exam it's a it's a private I see or just creation of 1/2 million kalana tokens you can find him and since lying idly there but that that was an experiment with people because I would ask students are you gonna pay me a thousand bucks and then now professor you're crazy great a plus they understood that

there's no happy why should I give you a thousand for what so that goes to show that the token gets value only if it E is linked to a rain acid and and eat the etherium tokenization thing helps you and people who do not understand it can keep get can get food very easily and I tried to show them just out of it was an experiment but I think very an impact you want because people understood hey Adriana swooning me there's no rennet they're not worth nothing I can't buy anything with that

yes you got the message now it only gets value if you link it to something gives you did you look into stable coins no because that's exactly that they're linked to a basket of currencies or commodities yeah you can but I I was looking more into real estate tokens I think that is quite fascinating because real estate this is very difficult to sell come some notaries all kind of people who get money out of it providing no value actually just by signing something I think that that's what I like ayah we have a problem there with

with some legal issues because some foreigners might not be able to buy property in some areas or in Switzerland for example it's not so easy so you have to take care of that as well if you tokenize a building because once it's out you don't know who wants it might be billionaire in in Russia it might be an Italian it might be the Swiss love you simply don't know it anymore so there are certain risks to that but I I like tokens assert I mean yeah if you call it staple tokens I call it real asset opens for derivatives of something now Gianna you've also been a

wealth manager in traditional finance at UPS since in Switzerland and do you often discuss these topics of cryptocurrencies of Bitcoin crypto assets blockchain technology with your peers from traditional finance I would discuss it but not that great length we talk about it you have to take it seriously because it's a fact people on a trade that people to create certificates structured products people want to benefit from that on so it's it's fair enough but that has nothing to do with with the real worth were 48 the whole idea of tokens and blockchain and

and as a matter of fact I think it's quite funny that the technology that prides itself cutting out an intermediary Indiana needs an intermediary to be exchanged and that's quite funny to me that's a paradox which wait wait which doesn't make sense miss it's illogical so if people say hey a traditional bank like ups or goldman sachs for whoever it's starting with beacon trading and thinks now it it got to prove that stamp of approval it's just wrong what these banks want to do is make a profit by the difference of

sell britain and ask espresso the difference which you would have to pay and what you would get and where the price is this is not of interest they just want to get that margin and so they could as well create an apple or orange desk at goldman sachs might be equally a profitable add echoes - ah ridiculous that is I think a technology that doesn't that wants to cut out an intermediary Indian needs an intermediary then something is definitely wrong so I don't believe in the long-term and sustainable or

sustainability of such trading desks they're gonna be out of business as that as fast as they popped up so don't hold your breath goldman sachs starting now might as well stop it and two years from now and i think they usually don't they look at it as an experiment and and so to me it's not the step of approval at all don't you think they're moving to offering bitcoin accounts for four customers that something yeah could be but it's fine you might as well offer save for watches or i didn't know a barrel for your oil if it's it's just a store you you see

you need to put it somewhere when you buy it they offer it to you it's gonna be an account but if they don't make enough money they will force you to move out they will give you a check or whatever so i I think it's it's if that's not the future that's definitely not the future if it's all about trading desks at traditional investment banks then bitcoin is gonna be doomed definitely so it's actually a bad song to me rather than a good okay what why because they they don't care about

Bitcoin teachers want to take out their marching and and that means basically they'll increase the volatility of the earth alright they might as well lower volatility because they add liquidity to the system I wouldn't devalue that belittle that I I certainly could see some money for that but it's not that it's the it's all about trading it's not about the idea of having a stable monetary system or to have a limited supply acid-based it's only about making money by selling buying buy and sell and and

again that's quite ridiculous to look at it because the whole idea of blockchain yes to get rid of that so I don't get it I can't take that seriously it's just due to increased their bonus at the end of year of the year and and and let them be happy fine I I certainly will never ever open a Bitcoin account with Goldman Sachs if then I would have my wallet app on my iPhone but surely not with Goldman Sachs so it's it's to me it's it's not a good sign actually it's it's a fad and

it will disappear and rightfully so hmm well maybe it's just experiments I mean you said it yourself it's it's a big experiment the whole cryptocurrency space um Bitcoin was the first and maybe they look at it in a similar way where do you think all of that is going once you know people have experimented for a while what will happen then I think it will be quite traditional you will have probably exchanges but they cost nothing it's automatic between various assets you know change well you as if you tokenize real assets and then you start to exchange it you

can read you can actually increase volume you can make markets deeper and less prone to crises your you allow investors to get access to a certain asset at a much lower price you don't have to cover up 10,000 or 20,000 bucks to buy a share you can get into it at five cents I think these are tremendous advances I also see a financial emotional as a big topic when you see that problem bringing half of the population do not have a bank account do not have a credit card do not even know

what credit is or what money is so education coupled with with smart blockchain technology can can can actually increase the the dialogues up that they improve their lives but it's not gonna be the trading desk at at goldman sachs that's gonna make any difference to the poor people their name in the developing world i think they're better uses for more for that technology than to be traded by a old Stein investment bank that's my point when you I mean you've been in finance for a very long time what what made you or what

what was your motivation to get into finance Center in the first place I main motivation was that the financing this at the center of economics it does it it funds a good project it improves lives it moves money from where it's not being used right now to people who want to invest and spend spend it now I think it was was like the idea being at the very center but what what what this also drew is that I think that Finance can as I always say improve

the or should improve the lives of people if it doesn't then forget it I I think it's not just there because it's there it has a function and we should rethink that we should redefine the role blockchain technology can be an answer to that and I think it can and it will with without wit coin doesn't matter but if it doesn't add quality to our daily life then finance is no wrong and that is nice because you can't have an

immediate impact if you do it rightly that that fascinates me still I'm so glad to be in finance um I think it's one of the most fascinating jobs were there any examples recently were you know you see the you saw that something you did in in your function in finance helped somebody else yeah it's it's daily we do that if they come they come to us first of all we with with with our Robert wises we democratize Wealth Management what used to be a domain for the very rich super rich has not been that has been open to to the less

privileged so people can get access to to to good asset management at the very low entry lemma so they can also benefit from all that know-how of investment know-how of that that new knowledge and and technology but also if people wanna buy a house it that it's great pleasure to find the right solution the right credit the right mortgage that that day and that that they can pay back it's easy as you saw in America before the crisis it's easy to to give out loans if

you don't care about what happens then you can sell it get the quick buck and walk away but that's not the point do you want to make sure that the family can stay in the house and if it's natural that the family eventually wants to have a house it's fine and if we can help them to get that sustainable solution it's it's a pleasure it's nice yes it sounds strange but it's nice I like that and I draw to see families in the house rather than in Miami out you from abandoned housing does that that that makes me sad that the movie Big Short was it was kind of a shock and you saw that in in Florida that's not what

finance is all about and technology and blockchain can make it even more efficient the delivery of financial services or insurances to the people so I'm quite excited that these technologies will actually make it even now even more exciting for for us in the financial sector to serve our clients what what keeps you up at night my soccer team losing all the time it's none well not that much I'm actually um

well it's not that I can't sleep it's it's would be sad because then I cannot serve and work intelligently so too tired no I certainly what bothers me yes they're the way we do finance today I hoped that we will make the system better more stable but I think we already planted the seed of the next crisis which will be equally devastating like the last one that potentially bought us me and I think we should rather soon find find a way as I said at

the beginning I hope that blocked Reno because could read that solution but maybe I had too too high hopes for that maybe there was unfair but I I still I'm still looking for for a way to make the system more stable that's a concern but doesn't keep me awake at night not yet as an entrepreneur who do you have role models well it's difficult I think you have to find your own you have certain people you respect for what they've done and I've great respect for people who have high ethics in finance that's not that's not very widespread

but I think people who entrepreneurs wealth managers the old-style private bankers that that's what I kind of like I respect for what they've done I I think I have great respect for the late Steve Jobs who who always came back and then he stalked his dreams and goals and delivered the way nobody would have expected he created a new industry so that I think I've great respect for more people in the social area nobody knows those in underprivileged areas who help them at

the very low salary I I have great respect for those people who really nobody knows but but you see him in witness that that stuff this the kind of people who tried to make the world better at any price and are not thinking only of the next holiday trip or the car or the next watch I luxury watch of course I like those people have great respect cool do you did I forget to ask anything no no if you covered pretty much everything I yeah no I I think it's ok I I I might

at the beginning well I might have been to to negative or sounder to negative on to new technology I just try to apply logic to the theme of crypto currencies or crypto assets or crypto whatever tokens you name it that that we should not forget our common sense and and to accept the fact that maybe it's not were friend or that it was a nice try but it didn't fly we should not be afraid of disaster so to speak because we will have learned a great deal but it will not make it better if we shout down

people who have a critical attitude or a less optimistic attitude towards cryptocurrencies and then we we not think we're on the right track that's probably my my main message let's not be confrontational let's try a way that helps each other to understand this animal better and and to see if we are doing so find ways that we have not known yet or seen yet to improve finance that's the whole point again if blockchain is not gonna help

the people it has no use if trading of apples at Goldman Sachs does not improve the lives of the people it has no use let's do four apples that's true for bitcoins that souffl blockchain that so for everything that's the key question does it add value to people and does it improve the lives of the people if your answer is yes congratulation we have a good tool ever good technology sustainable technology if the answer is I don't know think twice the answer is no forget it move on look for the ring that's the key question

even for blockchain thank you very much that your honor for taking time yeah no problem thank you thanks so much for joining us today more info on our guests than our sponsors is in the show notes of this episode and on the podcast website the blockchain and us comm to help people find this podcast it's important that you download and give it a top rating and review on iTunes or on the podcast platform of your choice hi Manuel staggers and I thank you very much for listening you [Music]