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The crypto crisis is real but the technology behind it shall remain unharmed. Let’s not confuse crops with straw.
Theoretical principles and their practical application can be poles apart. It shouldn’t be that way, of course, but this is the highly imperfect reality in which we live and operate. Sad. Most times, disappointing. Other times, plain criminal. While the crypto market was already deeply suffering before FTX, the horrific exchange debacle evidently threw it down to its knees. It also created a spiral, involving many other notable entities — BlockFi being the latest one — and not just that: it betrayed the trust of all ecosystem participants. With the sudden self-combustion of a super hyped $32 billion company, the promise of transparency and accountability has been devoured by such violent flames, burning paddy stubble fields look like a green valley vision, in comparison.
If we thought high volatility was an issue, we finally encountered a greater one: destabilization of the fundamentals and consequent loss of credibility. Experiencing the subversion of the very reason an alternative system to fiat was created in the first place greatly pains investors, traders and enthusiasts alike. In cases like this, it’s so tempting to let shockwaves shake everything we thought we had understood, to the point we may want to disown all that pertains to what now feels like a lie. But an issue arises. Feeling— when it comes to dealing with the aftermath — is tricky. Emotions inform our system of the trauma and hold great value in the healing process. They can’t however help us discern what’s true and what’s not. For that, we should apply logic and critical thinking.
Therefore, now like never before, it is important to discern that the unraveling of the crypto market has nothing to do with the underlying technology and everything to do with flawed human character, enabled by lack of accountability, governance and compliance. All things that occur “off chain”, as you may notice.
Distinction
Bitcoin could go down to $10,000 (source: BitMEX) or up to $28,000 by the end of the year, according to an analysis from Deutsche Bank. Its fate could fall somewhere between $9,000 and $12,000 (source: Delphi Digital) or reach the $25,000 mark, according to a 53-expert panel as reported by Finder. The future of crypto is highly uncertain and debating on something that is all over the place is frankly speculation at this point. What is not speculation, however, is the technology that made crypto possible. Blockchain for many is synonymous with crypto but the two are NOT the same. Cryptocurrencies might have been the first popularized use case, however the blockchain revolution can hardly be contained by one application only. Almost every industry has been investing heavily to find new fitting scenarios and apply this technology. Financial services and real estate especially have been eyeing many opportunities relating to tokenization and the lifecycle digitalization of the asset.
Blockchain, also known as distributed ledger technology (DLT), has practically helped many large and established firms launch a series of products and services that are not ideas but a material part of their business. Real operators, with a substantial client base and massive annual revenues have deployed these solutions in the bond and equity market, structured products as well as mortgage financing, global repo, life and health insurance, annuities, and healthcare administration, just to mention a few. Crypto crash or not, they don’t intend to back off because the efficiencies created are extremely real and valuable to them and their constituencies.
Data
The power of blockchain lies in its capacity to provide a superior grasp on data, facilitate an easier information flow, and instill security among its users. Some sectors have been more aggressive at exploring this technology, while others are taking their time but at this point almost all are studying how this innovative tool could be of benefit. Healthcare is one of those industries. Although not known exactly for its avant-garde spirit, blockchain applications ensuring increased security and transparency are gaining the attention of many leaders in the space. The statement released by the World Economic Forum in the fall of 2022 helps us better frame the opportunity, as it pertains to putting the patient first and supporting outpatient services.
Distributed ledger technology is much more than data storage. It allows the secure transfer of patient medical records and personal information, helps manage supply chain efficiently and can benefit healthcare researchers in their quest to holistically map the patient’s health. Blockchain also creates an integrated environment where bottlenecks and possible sources of errors are virtually removed. Once the record is entered and verified, it becomes a link in the chain and a piece in the puzzle. Healthcare, perhaps more than any other industries, has suffered from limited system interoperability and constrained big data exchange. Blockchain can overcome these hindrances and empower both patients and providers in the pursuit of overall improved health management.
Dos and don’ts
It’s easy to get carried away when a revolutionary technology enters our life. We picture in our mind so many applications, so many use cases, so many ways to make a quick and bold profit and, oh well… It can be a bit of a slippery slope. That’s eventually one of the pitfalls in which blockchain has fallen. When creating something new is so important to know what the north star of the project is. Call me pragmatist, but I have no faith in innovation that has no practical area of action. When all is said and done, a smart discovery is not such, if it can’t produce quantifiable results that have measurable impact in the life of a business with tangible positive outcomes for customers.
Creating tokens for the fun of it looks more like a game than anything else — a dangerous and expensive one, as it turns out. Distributed and decentralized technologies can do much more and much better than that. If the objective is to create the premises for a more fairly distributed access to wealth, or design an empowered user experience, or instill informational transparency, or clear out privacy concerns, or ensure the immutability of data, we shall strive to stay true to it, whatever it is. Chasing shiny objects almost always blinds us of what matters. And not just that, it jeopardizes the possible value it could have been created otherwise.
The sophistication we create is the deceit behind which we can only hide for so long, before the world finds out. Greed, sick ambition and dishonesty are entrenched in human nature and technology can’t save us from ourselves. Nevertheless, through tech, we can improve our dealings, modus operandi and prospects. Actually, we must. Blockchain is a tool that makes visibility and clarity its core. No, it doesn’t mean it’s safe beyond imagination but it is the best we have been able to build with our current vision and technical domain. Whether or not cryptocurrencies survive this difficult stretch and the state in which they may reach the other side are actually irrelevant to the blockchain as a whole. From a big picture perspective and a futuristic point of view, one failed use case will carry little relevancy per se and actually will teach us quite a bit. Despite living in an era of media massification and shell empty values, it’s what doesn’t make front covers of popular magazines that still carries the biggest weight. Curios what it is? Unglamorous real work. And blockchain can improve it greatly. Thanks for reading, tech friends. Since we’re at it, remember to work hard and play hard. I’ll tech to you soon.
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