The first two editions of the Women in Investing series brought together a cadre of remarkable female entrepreneurs. Alongside Republic’s own Lisa Carmen Wang, they introduced our users to investing and the importance of building communities.
For the third episode, we’re diving into blockchain and cryptocurrency. The incredible growth of technologies like Bitcoin and Ethereum has been in the headlines for what seems like years now, but it’s imperative to cut through the hype and get to the core of what makes cryptocurrency, blockchain, and decentralization such hot topics.
The first step is understanding the foundational relationship between cryptocurrency and blockchain. Blockchain technology allows for decentralized networks, atop of which cryptocurrencies like Bitcoin run.
Decentralized networks are not controlled by any central authority like a Federal Reserve or a bank, and people all over the world can transact securely, cheaply, and without limitations. The next generation of blockchain networks that are emerging now—like Polkadot, Algorand, and Cere—feature innovations like smart contracts, which allow for platforms and entire digital economies to function with decentralized systems. That’s where the real fun starts!
For a deeper look into the conversation, here are 5 takeaways from the Women in Investing—Blockchain & Crypto session, with minimal jargon and maximum impact.
It’s all about trust
“I think Bitcoin is a big deal,” stated Republic’s MENA Managing Director Anwaar AlMahmeed. “But even more importantly than that: blockchain technology gives you trust. You can interact with anyone around the world and you don't need anyone in-between to facilitate. It’s a trustless system, which is so significant.”
Trustless systems—as exemplified by the fast-growing DeFi (decentralized finance) sector — allow anyone to take part in digital economies and utilize financial instruments without the prohibitive element of intermediaries, like banks and institutions, guarding the capture of value. It’s a major evolution in the way that humans interact with assets. “Looking back retrospectively [from the future],” Anwaar continued, “I don’t think we’ll see how the world would have developed without blockchain. It will seem like something that was inevitable.”
A global impact
Decentralized networks are global and always online. While much of the discussion of cryptocurrencies like Bitcoin may seem speculative, in many parts of the world, the tangible, real-life benefits of the technology are front and center.
“There are a ton of applications in the West and in our financial systems, but there is also a huge opportunity to impact the rest of the world, in developing countries with citizens who can't necessarily trust their organizations and trust corporations that much: Africa, India, Eastern Europe, Russia. There are 2.5 billion people in the world who don't have access to financial services,” explained Angie Ramirez, Head of Sales at decentralized video platform Livepeer.
“I'm from Colombia, and transparency and accountability are big issues in government there. Billions of people who don't have access to financial services, access to secure identities, to healthcare records, insurance. There are a ton of applications, and it's really exciting to see all of these different companies that are working to help using this concept of trust.”
Crypto in practice
Angie Ramirez went on to use the example of the current economic climate in Venezuela to show the tangible importance of disintermediation as it relates to cryptocurrency for real people around the world. “People in Venezuela are having issues with the national currency—the Venezuelan Bolivar—which has been experiencing insane inflation over the past several years, such that if you get one Bolivar today at 12:00 PM, by 2:00 PM, the value of that Bolivar will have been so diluted that it's not worth anything. Thousands of people are leaving the country every day. Many have families abroad send them money, but that process can take many weeks because each transfer has to go to through a series of banks and intermediaries before it gets to [recipient] accounts in Venezuela—and the fees can be higher than 50%.”
“If you send someone in Venezuela a hundred dollars, they might only get $40 of that,” Ramirez explained. ‘You're already losing a lot of the value that you're sending. On top of that, once your family members take the money out on the other end and run to the grocery store to buy essentials, that Bolivar is likely not going to be able to purchase the amount of groceries that they need. That’s why a lot of Venezuelans have actually adopted Bitcoin. It's become a really important currency there. They're able to evade this problem with hyperinflation that's caused by government instability. Bitcoin is not routed to a bank or a third party or centralized authority, the government can't shut your bank account down.”
It’s more than just finance
While cryptocurrency is the first major application of blockchain technology, almost every conceivable industry is experimenting with decentralization. Conversation on the wide-reaching effects of blockchain tech namechecked a number of key use cases. “Major telecom companies, the logistics and shipping industry. Large companies like Walmart are actually using the technology to understand their product inventory and their stock,” explained Sarah Tulin of SFOX, also adding examples of microtransactions in gaming and crowdsourced data.
“Right now, there’s a big boom of people talking about NFTs, which are non fungible tokens,” adds Elizabeth Olshanetsky of Republic Labs. NFTs are unique digital tokens that come with provenance, access, and ownership rights coded into them, and have been quickly adopted as the new standard for trading collectibles and digital art. "Recently, the art auction house Christie’s sold an NFT painting for $69 million,” Olshanetsky stated.
Angie Ramirez laid out another exciting use case in healthcare and medical records, “The current state of healthcare is that patient data is held across different institutions in legacy and siloed EMR healthcare record systems. For example, if you get your blood drawn in one location and you go to the doctor somewhere else, they won't have the same records. You'll have to ask the blood lab to send it to your specific doctor. You'll have to give explicit permission. And that process can take a long time, and it gets even more complicated if you're traveling across international borders or you're going from one healthcare system to another. What you can do to solve this issue is just use blockchain technology to record patient information on a distributed ledger, and allow different stakeholders to access that information without relying on one proprietary or closed system—so long as you’ve given your permission.”
When in doubt, DYOR
There’s a lot to be gained from applying decentralization to different industries. That’s one of the reasons why the emerging world of blockchain and cryptocurrency is equal parts exciting and overwhelming. There are so many new concepts to keep up with, and things move so fast that it can seem difficult to keep up. The cloud of jargon that’s associated with the industry can make it even more challenging to get your head around.
There are simple solutions to take agency over your understanding of this new technology and its fundamental impact on the world: “if you're ever stuck on something, just look it up, watch a video on it,” explains Olshanetsky. “Because at some point, everyone that's an expert on these topics now was themselves stuck. don't be discouraged if you see a bunch of words that you don't understand. It’s just like learning a new language.”
An acronym that’s become popular in many crypto-related communities is DYOR: “Do Your Own Research.” Just as cryptocurrency and blockchain can empower individuals to take control of their engagement with economies of value, the onus is on us all as individuals to take control of our own education on the subject. We’re still at the cutting edge of this new era, but the information we need is right at our fingertips.
Thankfully, there’s an ever-growing and powerful global community of enthusiasts, entrepreneurs, and organizations committed to helping each other learn about the intricacies of blockchain and cryptocurrency—and the Women in Investing series is a part of that. We’re here to help, so come and get involved in future sessions.