Blockchain, the opportunity to seize in the “Internet of Value”

Engine of Change

Crises are one of the main drivers of societal change, and indeed it was the 2008 financial crisis that gave rise, a few months later, to one of the greatest inventions (or revolutions) of recent times, introducing Bitcoin’s Blockchain with its intrinsic value.

An initiative that, I am convinced, even exceeded the expectations of Satoshi Nakamoto himself or at least many members of the team he initially discussed with, who could hardly have predicted more than 11 years of uninterrupted operation.

The Pandora’s Box was opened in January 2009, giving people the opportunity to exchange value freely, with the precise goal (achieved) of being uncensorable.

Exchange of Value

If in the 1980s the exchange of information was effectively made free, giving rise to phenomena that were unthinkable only a few decades later, the free exchange of value could act as a catalyst for applications that are still unimaginable today, even more so due to the creation of mechanisms that feed collective trust and the emergence of a shared “truth” – the blockchain – in a context of parties in competition with each other. Aspects that go beyond even the function of money thanks to smart contracts and other applications where it may be useful to have a shared and known “truth.”

If in the early years these concepts were known mainly to enthusiasts and professionals like readers of this blog or those, like me, with a background and personal interests in computer science and finance, today and especially in the future, they will inevitably spread more and more, driven by curiosity, and certainly also by a pinch of greed in those who see this evolution as an opportunity for gain.

The challenge is shifting more and more from the technological level to the political level, given that the novelties introduced inevitably undermine the “monopoly” of central banks, if only because this was the other goal (also achieved) of the creation of Internet money. And that is why institutions cannot ignore the phenomenon.

Political and regulatory authorities as a source of change

The approach taken in the coming years by regulatory authorities, given that they cannot avoid the inevitable (namely the spread of the freedom to trade value), will be decisive in determining the speed at which these changes occur and the areas in which competencies are concentrated and condensed.

This is why politics can take a strategic step if, with foresight, it sets aside the desire and tendency to control (what was born to not be censored) that have characterized financial policy mechanisms in recent decades, and accepts the fact that the generation of internet money has been essentially sanctioned by a mechanism that generates collective trust: it is the concept of trust, in fact, that allows the birth of new currencies or, in general, mathematical units to which people recognize a value.

I am firmly convinced that communities that are the first to open the doors to electronic currencies will have a competitive advantage (even just for the expansion of the circulating monetary base) over those who are more hesitant.

Of course, this change will not be painless. Like any innovation, excessive enthusiasm leads to errors of evaluation, as can be seen with the dot-com bubble of 2001, and in this case there will certainly be (as there already have been) some initiatives that have shown to have “feet of clay”; on the other hand, the same hype that often surrounds the word “blockchain” is sometimes associated with products for which it is essentially a red herring. But, once the initial turbulence is overcome, progress will remain.

The challenge: making Italy a crypto-friendly country

This is why the challenge (and the dream) is for Italy to be a “crypto-friendly” country, in which virtual currencies and fiat currencies can be side-by-side, accepted, and recognized within a clear framework, and it is for the realization of this perspective that I believe it is necessary to work immediately in Parliament, both because this means anticipating the future, and because in a time when the circulating currency is decreasing, the extension of the monetary base can also be, in macroeconomic terms, one of the responses to the situation we are experiencing. Furthermore, Italy, with its skills and brains, has everything it takes to play a leading role.

To make our country “crypto-friendly”, however, it is important that information, culture, and in-depth knowledge on these issues are spread throughout politics and society more generally, in order to overcome the veil of mistrust fueled by ignorance of the phenomenon. In this case too, the phrase remains true that “the greatest investment that can be made in the crypto sector is in education”.