Crypto - Opening Remarks with Roland Berger

foreign [Music] thank you very much for coming and being with us anything you write about crypto gets obsolete every half an hour so it's quite difficult to talk about crypto in general but I'll make an attempt at it first things first um what you're going to hear from the podium today that way is going to be less of Interest I think amongst you are a lot of experts so talk to each other that's where all the learning will happen and again we want this to be a learning day we want to talk a lot about topics that are broader than just the financial aspects of crypto so cryptography and the crypto economy is a very interesting part of all our lives it's got a lot of drama intrigued suspense and even some romance so it's a pretty important part of our Lives now and it's gone mainstream and that's what we're going to talk about what is it broadly and how it has gone mainstream and how Abu Dhabi and the UAE has embraced it and is having it Thrive globally because a lot of the people here are engaged with it in some shape or forming let me give you some numbers eleven percent of the UAE Nationals are UAE residents have some sort of a crypto engagement either their own currency or they engage with cryptography in some shape or form number two we are number 10 in the world in terms of the crypto economy being a participant in the crypto economy which is also an amazing statistic to to know and adgm and Abu Dhabi are clear leaders in making sure that there are sensible regulations a very very permissive landscape for all of you to be coming coming here and making this a home so those are the messages from from my side now let's talk a little bit about the crypto economy and what it means well of course we all talk about the future of finance and finances where a lot of the viewpoints were in terms of disruptions and efficiencies and movement of money from A to B and we talk a lot about the manifestation of them through exchanges and other forms of movement of money and what we realize is that that's only a small part of the crypto economy right and the way I look at it is if you look out in the ocean and you see the water there's above the water and below the water right so we're going to talk about the water line and we'll talk about what's above the water and what's below the water and above the water is what you see what you hear what media tells you and how you feel and how you react with that and a lot of it is if you look at what is happening in the Contemporary news regarding you know exchanges and others nothing is very different than what happens in a Fiat economy exchanges rise and fall Finance goes up and down that's just normal right so it's absolutely clear to me that from our perspective it's a normal evolution of any technology and I think we are very privileged to live in a world where Innovation is far outpacing our own capacity to learn so that's really where we are today so when these crypto exchanges go sometimes bust a lot of it is Leverage very simply if you have low leverage you're not going to make much money if you have high leverage you have a risk of failing what's that balance we need to figure that out so when you talk about Futures Future Finance and how Finance is being built it's a normal thing for exchanges to come up rise and fail life goes like that so when we talk about corridors we talk about lanes and windows and so lanes are for example remittance remittance is a laneway or a product or or a viewpoint and a window is how much transactions can happen through that so if you were going to have Financial inclusion and have somebody move ten dollars from A to B and charge them one dollar in the Fiat economy that's 10 gone versus if crypto enables that to happen seamlessly with very very little amount of money taken away it's amazing because that person can have a livelihood somebody makes a dollar a day would not lose that dollar however on the same note the same technology can move a billion dollars from A to B without any friction is that good or bad should it be regulated or not and here is the point the point is that it should be regulated and perhaps it should have some very very prudent and thought through regulations to be able to make sure that the economy thrives in both directions so if you look at a dumbbell you have one side way again and the other side weighing in and that balance is an important balance so I'll leave that viewpoint on the future of finance and move on to other topics so what else is above the water line today we talk about the metaverse metaverse is also about the water line everybody talks about the metabolism everybody wants to be in the metaverse everybody wants to be a part of the metaverse Now call it fomo or call it real I think it will become real at some point in time but imagine to to for everybody to be on the metaverse you need incredible amounts of computing power you need infrastructure like you know you wouldn't have seen today latency is an issue and also movement of data requires a lot of bandwidth so all of these things are going to be problem if we are going to everybody's going to go right in the metaverse but it is real it is going to happen things like digital tourism things like tokenization of of your engagements with various Brands all of that is going to happen more from the marketing sense but also from a utility sense building digital Twins and building utility above that buildings that can be adjudicated and and and and you could service on the metaverse is going to happen let's move to the next one which is above the water line mining excess energy can be used to load balance and mine Bitcoin right proof of work is one protocol but there are other protocols as well however at least if proof of work is considered mining is an important part that everybody talks about because you create nodes you create security you create a robust ecosystem for Bitcoin and when that happens you realize that when you mine something with no net increase in energy production and it's just balancing the grid then it's probably a good thing if you consider Bitcoin of any value if you consider of no value then it's probably worth nothing right because it's always and if from a global sense if people talk about Bitcoin mining and how much energy it uses you'd be surprised it's 0.16 percent of the global energy it's minuscule out of the many trillions of terawatt hours produce every year Bitcoin mining is minuscule so in many ways when you look at it from an economic point of view if you put any value to Bitcoin mining is probably one of those things where you should look at and consider as a part of the ecosystem now what's below the water line things you don't see things you don't see are supply chain how do you make sure that you have provenance of Goods so how do you know the food that arrives to your table from the farm arrives in good health how do you make sure the vaccines that come from the United States to hear come in good health how do you make sure that the wine you buy in the marketplace is authentic how do you make sure that the bag you buy from Louis Vuitton Israel a lot of that can go in the blockchain and the blockchain can actually assist you in making sure that that supply chain Integrity remains because you can always go back and see where and when each of those items went through and the supply chain Integrity remains and that is one of the key utilities of blockchain right so as I'm kind of stepping you through I'm just sharing with you the broad view of what the crypto economy is all about what else is below the water line data economy who whose data should you have what should you do with that data for example if you produce your data should you be able to give it away which you do today to Facebook and others or should you be able to own it and be able to do something with it for yourselves there are many examples out there where companies have come up with rewarding you for sharing your data in the form of tokens and that's one more way of individuals participating in the crypto economy and monetizing their own lives as we move forward tokenization is another one where many many things are being tokenized KKR is doing tokenization for funds real estate is doing tokenization as well why do they do that because you create a second secondary economy and you are able to trade assets and you're able to make life more efficient and remember everything that is happening in this space predominantly is about cost reduction and efficiency right in many ways and lastly digital identity each of you will ultimately have a digital identity each of you will be sharing their digital identity with people and each of you will make sure that only things that need to be given will be given today when I go to any place here I'm giving my Emirates ID my Emirates ID has every single detail of mine in there why should I all they need is my identity right can I not give my identity identity in another way so that they can say oh yeah this is for Rose and he's going to come into our building why do I have to share everything that I have these are the concepts that are being talked about and I think they will ultimately become real at some point in time so saying that I want to kind of give you a broader view of what the technology does so it's not just about Finance but it's about a large Universe out there that's below the water line that you hardly ever see but it runs their economies and will continue to run our economies I'll give you another interesting point everybody's thought that oh with the you know collapse of some of the exchanges and others you know Bitcoin would be dead well Bitcoin went from what 20 000 to 16. that's not a collapse in any which way right I wouldn't call that a collapse at all I would say hey that's very robust in many ways things were moved on and they will move on if I look back into the life that I had in Silicon Valley when I saw Facebook form Google form and others formed all of these companies started in a world of uncertainty in a in a world of a depressed Market so I always look at when markets adjust it's a great opportunity for entrepreneurs to come up and develop new things and new ideas and that's what you see is happening a lot of development of new ideas in the space of crypto and that will continue for some time to come so I leave the stage today by sharing a one thought experiment and saying where are we today in the evolution of crypto so think the first Bitcoin mine was at 6am in the morning and the last Bitcoin mine will be at 6 pm do you know where we are today we're at 7 15 in the morning we've got a whole day and a whole afternoon and a whole evening to go thank you very much [Applause]