“It will take decades to implement Libra”: the most interesting insights from Web Summit

Marketing blockchain projects is our key area of expertise, so we couldn't possibly miss Web Summit – the best tech event in the world, according to Forbes.

Crypto projects and their prospects were the focus of the event, which The Economist calls “Woodstock for geeks”. We got to interview several key figures in the blockchain industry, asking them about the future of the market, what makes a successful project and what they think of Libra. Read on to find out what they said.

Photo: facebook.com/WebSummit

Could native crypto assets issued by large corporations make a real impact on traditional finance?

Samuel Collins, Bitpanda

Yes, definitely. The traditional financial market isn't available 24/7, it's expensive and old-fashioned in the sense that it relies on secrecy and non-transparency.

Blockchain technology will give people control over their finances. Instead of going to your bank manager, who will sell you a product and take commission, you will be in charge of your finances, so you'll be able to invest when you like and as much as you like. The amount doesn't matter: it can be a large sum or even less than a euro. You’ll be able to transfer money instantaneously and for free – or at a minimal fee.

The system will become transparent and open. No banking secrecy, no inflation and bubbles caused by shady deals. That's what blockchain will change.

In the future, cryptocurrency will not replace fiat. That's not what it was designed for. Cryptocurrency is a method of sending, acquiring, and investing. Fiat currency is a day-to-day currency that is accepted, regulated, and safe.

Cryptocurrency is volatile, but it isn't subject to the arbitrary inflation of fiat currencies. Euro is controlled by the European Central Bank, which can do whatever it wants. Cryptocurrency has no central bank that it must respond to. So in five years' time fiat and crypto will operate side by side; they will have different uses and work together. Not one will replace the other.

Ivan Gowan, Currency.com

Banks are in a difficult place right now. On the one hand, they have an advanced legacy infrastructure, but on the other hand, they suffer from massive costs and outdated technology.

Moreover, they are heavily regulated. It's hard to promote innovation and manage investments in such conditions. In the past ten years, technology has kept moving forward very aggressively, with lots of new fintech providers that attract a younger audience and win their share of the market. Consumer expectations have changed radically, and traditional banks have trouble delivering on these expectations.

Ivan Prokhorov, Platon Finance

A good example if Facebook with its Libra cryptocurrency, which Mark Zuckerberg plans to launch in 2020. If it does happen, it will be revolutionary. It will be possible to use Libra as the internal currency of a social network that has 2.4 billion active users. It's a gigantic market and a strong potential competitor to banks.

Even if Libra doesn't get launched, it's only a matter of time till a corporation like Facebook creates a crypto that can compete with the US dollar and outcompete Bitcoin.
             

BDCenter Digital commentary

Naturally, Libra was a hot topic at Web Summit, as well.

Left to right: former boxing champion and founder of Klitschko Ventures Vladimir Klitschko, Machine Zone CEO Kristen Dumont, and CNET founder Halsey Minor.

During the panel discussion, Halsey Minor criticized the project. He said that Libra would put Facebook in the same position as China, Russia, and Iran, which are looking for an alternative to US dollar and avoid sanctions.

Kevin Weil, VP of Calibra (Facebook's digital wallet project), also spoke at the conference. He said it would take decades to fully implement the project and resolve all the regulatory issues. He also pointed out that the main purpose of Libra is to enable money transfers.

It's worth remembering that Facebook first announced its plans to create a digital currency in June. However, in fall the project was attacked by the Congress, leading to the exit of several key partners, including MasterCard, PayPal, and Visa. This reduced the number of the founding members to 21.

What makes a successful blockchain project?

Samuel Collins, Bitpanda

Successful blockchain projects are those that provide value. You don't need to go crazy and change the world —you just need to provide value in an area where there is none. For example, in countries with limited access to banking infrastructure, cash money, and overseas payments. Somewhere in the middle of Africa or Mongolia. A project that manages to solve that issue and give people access to their cash on their mobile phone – that would help a great deal, for sure.

Ivan Gowan, Currency.com

You need three key things.

The first is the team. You can have lots of ideas that could disrupt the world. But you have to recognize that, while blockchain technology is incredibly powerful, it's also quite complicated. So you need people with a specific type of thinking and attitude – people who can really go into details and deliver on your ideas.

The second thing is identifying the consumer's real need. Who are your users? What do they need? How can you help them achieve what they want and are you solving a meaningful problem?

The third thing is using blockchain appropriately. Lots of projects started by trying to raise some money and use fairly complicated technology without disrupting the business model. Blockchain has both advantages and drawbacks compared to traditional data management systems. So it's really important to use it in an appropriate way to deliver innovation.

Ivan Prokhorov, Platon Finance

The project must be interesting and relevant to its intended users. How well the technology is implemented is a secondary factor.

BDCenter Digital addition

Lenovo CIO Arthur Hu said that technology alone can't save a business. The key to success is to focus on the desired result – and only then look for the right technology to achieve it.

Credits: lenovo.com

What was the last thing you've paid for with crypto?

Samuel Collins, Bitpanda

A taxi ride in Prague.

Ivan Gowan, Currency.com

I look at Bitcoin more like gold than a hundred dollars in my bank account. Both gold and Bitcoin satisfy the definition of money: they have a recognised value, they are easy to exchange, transfer and durable.

The challenges that Bitcoin faces are similar to those faced by gold: there are significant costs involved in transacting with them. So it's unusual to transact with both these assets in extremely small amounts.

Ivan Prokhorov, Platon Finance

I haven't paid for anything interesting with crypto, to be honest. But I have friends who bought an apartment in Italy for Bitcoins.