What’s happening in the world of cryptocurrency?

Daniel Schwartz speaks about the latest events in the world of cryptocurrency.
Daniel Schwartz speaks about the latest events in the world of cryptocurrency.

At the Pattaya City Expats Club (PCEC) meeting on Sunday, August 18, Daniel Schwartz returned to speak on the latest events in the world of cryptocurrency, especially how the upcoming Facebook Crypto could change your life. Dan previously spoke to the PCEC in December 2017 at the height of the Bitcoin and Cryptocurrency market fervor. He says a lot has happened in the last 20 months, having seen the Cryptocurrency markets at record highs then crashing down and now being back on the rebound in the past couple of months. Dan is an author, investor, business owner, speaker and well known in the Cryptocurrency and Bitcoin Over the Counter (OTC) markets. He is the CEO of 3T Network PTE Ltd. and Co-Owner BIZpaye (Thailand) Co. Ltd.

He began his presentation by briefly explaining why he does what he does with emphasis on its fun, not about money, but rather about what money can do. Then he gave some background information about Bitcoin, one of the first cryptocurrencies, and blockchain, the method used for trading such currencies.

He pointed out that there is a need for cryptocurrencies as the world still runs on cash, with 85% of global transactions using cash which can be hard to move around, and easy to steal; noting that US retail businesses lose about $40 billion annually due to the theft of cash. He presented several graphs showing the number of blockchain wallet users worldwide 2016 – 2019 (increasing each year), distribution of Bitcoins, and investment in cryptocurrency by venture capitalists.

Then he asked the question, what is Facebook Libra and why should I care? He then explained what Facebook intends to do with its Libra cryptocurrency through its Calibra Wallet. It is proposed as a way to pay people or companies globally without a fee. Eventually, it may also serve as a form of payment for contracts, loans and insurance. The combo of Libra through Calibra allows Facebook to provide loans, credit, money transfer, and e-commerce with the simplicity that it currently allows for person to person communications. Further, this ultimately could become one of the most functional open banking platforms outside of China.

He then showed a slide stating the Mission of Libra, which is a simple global currency and financial infrastructure that empowers billions of people. Further, to revamp money, revolutionize the global economy, and provide for better lives. Followed by Facebook’s vision that Libra, a cryptocurrency built on blockchain technology, can be used to spend and secure their money allowing a more comprehensive global financial system. Further, that Facebook considers Libra is needed because of all the people not served by a bank or similar financial institution (unbanked) in the world, which is 31% of the global population.

Dan said the set up for Libra is through the Libra Association, whose founding members represent various financial areas for payments, technology and marketplaces, telecommunications, blockchains, venture capital, as well as some nonprofit and multilateral organizations, and academic institutions. These include MasterCard, Visa, PayPal, and, of course, Facebook/Calibra.

Why is Facebook leading this? Dan noted that it is a huge opportunity for them with their Calibra Wallet and would be considered a powerhouse with their 2.4 billion users integrated into everything. So, what is the future of Libra? Dan suggested you think of the power of having 2.4 billion users of a distributed application (Facebook). They have so much data on the 2 billion people; not just name, but ID, address, phone number, their family, friends, real- time & historic location, what they like, and more. He mentioned that they probably know you more than you know yourself. And, with Libra, now your wallet too.

However, Dan mentioned that Libra still has a few issues to deal with. He cited Simon Gleeson, a partner at Clifford Chance (one of the world’s pre-eminent law firms ) who said, “Anything that deals in money, invests that money, issues tokens in exchange for that money and promises the holders of those tokens security of value based on that investment, is currently either an investment firm or a bank.” Thus, Facebook could be facing additional regulatory issues besides recent scrutiny due to its ways of utilizing data and that verdict is still not in yet. Under such circumstances, Facebook is getting into something which is not entirely regulated and controversial in most countries.

Further, Libra coin is backed by the Libra Association’s reserve and is not pegged to the US dollar with a 1:1 ratio; hence, you cannot consider it to be a stable coin because the reserve value is not clear. Libra is using blockchain technology and has launched a currency which is similar to credit card reward points which can be used for various purposes. Looking at the fundamentals of Bitcoin, it cannot be considered Libra as a decentralized and borderless cryptocurrency, rather it would function like PayPal or a large multinational bank which would start its operations with over a 2 billion user base at the first day.

In conclusion, Dan gave some predictions on the future of Cryptocurrency. He expects the development focus will move from tech to user experience. Blockchain will evolve from experimental projects to tangible products, proof of stake experiments will deliver network scalability, a top 10 social network will integrate blockchain, a sovereign nation will launch a digital currency, gaming will be the biggest driver of consumer blockchain adoption, and regulation will move blockchain from the fringes to the mainstream.

He then gave some final thoughts. The First Rule of Cryptocurrency is to invest using speculative money; that is, assume it is gone and be prepared to lose it. Have the proper mindset. Keep abreast of amazing developments in technical and regulatory. Use dollar cost average. Take profits and get in the game.

After Dan’s presentation, Suthida (Apple) Oonbang­luang, a committee member for the Blooming Club, announced they were organizing an upcoming free meeting on “Seeking True Happiness and Love through Meditation” and invited everyone to attend. This was followed by the Open Forum where audience members can ask questions or make comments about expat living in Thailand, especially Pattaya.

For more information about the PCEC, visit their website at http://pattayacityexpatsclub.com/.