Charles Hoskinson, an American entrepreneur, crypto-expert, and mathematician, has delivered a keynote address in Davos on the global financial-technology system. The Co-founder and CEO of Cardano delve in detail about the emerging trends in the cryptocurrency and blockchain industry and the impact of these trends on the global economy. Specifically focusing on segmented and silos approach adopted by the conventional banking system and financial industry, Hoskinson emphasizes that in this day and age, when people are increasingly championing the cause of the global market, universal system based upon the cryptocurrency and blockchain technology is the need of the hour.
Crypto Adoption and Protocols
Using the example of nomads in Mongolia owning Bitcoin, Hoskinson drives home the point that the cryptocurrency revolution is on the rise and its adoption is gathering pace with each passing day. We all are aware of the importance of protocols in the cryptocurrency and Hoskinson devoted a lot of time on emphasizing this aspect. Unlike the conventional financial system which requires checking of regulatory compliances on country specific-basis, the system in the cryptocurrency and blockchain has automated these checking mechanisms.
Take, for instance, the term of the smart contract, which is extensively used in the context of ethereum. The smart contract is nothing but an automated system of checking the protocols and ensuring that payments have been made in accordance with the set of rules and regulations. Further, quoting the example of an exchange which typically has to spend millions of dollars to make a software to work in accordance with specific rules and regulations of a particular country, Hoskinson says that such a huge amount of money spending only for one specific region is not a very productive use of the investment.
Crypto Applications and Scope
Highlighting the different applications and wide scope, Hoskinson touched upon a range of areas where the cryptocurrency and blockchain technology can be utilized – record-keeping, verifying the property claims, supply chain, and so forth. He also uses the example of coffee farmers and stresses the use of blockchain technology can create a win-win situation for all the stakeholders involved in the supply chain process. Hoskinson also notices how the strong and affluent countries continue to dominate global proceedings of the financial processes while leaving the week and feeble nations to fend for themselves. This disparity can also be addressed through the use of blockchain technology as no intermediaries, or dominating power will be allowed to interfere with the system.
Energy Issues and Challenges
Hoskinson also tries to address the criticism that is often directed at Bitcoin and other cryptocurrencies – the use of excess energy required in the mining of digital coins. It is indeed a very cost-intensive process as mining involves the use of high computing power and electricity. Hoskinson informs the audience that new technological innovations have dramatically reduced the amount of electricity required in crypto mining and in the future, the required amount of electricity is going to be reduced further. Towards the end, Hoskinson points out that the technology and operating mechanisms in the crypto industry are evolving very quickly and people will witness more efficient and sustainable practices in the times to come.