Listen to Episode 34
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Blockchain and Cryptocurrencies are just beginning to enter the world. Companies such as Walmart, UPS, FedEx, IBM, Dole, Nestle, and more have adopted blockchain technology to revolutionize their businesses. Every day, there are an average of 185,000 transactions in Bitcoin alone.
In episode 34, Shane Liddell, the CEO of Cryptologist and Co-Founder of the Cryptoconomy Summit comes on the show to discuss this emerging economy and how it will effect our lives.
Be sure to tune in for a thought-provoking episode.
Thank you to Zach for his $30 per month support! As well as to Mike, Julie, and Tiana for becoming $15 per month Patrons!
Show Notes (abridged script)
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Cryptocurrency and Crowdfunding
Shane became involved in the crowdfunding industry after a wildlife sanctuary in his hometown in South Africa was in need of funds. He discovered the IndieGoGo platform and raised over $20,000 for the sanctuary. During this time he learned some of the ins and outs of crowdfunding. Eventually he started his own business, Smart Crowdfunding.
“I was more drawn on the financial implications of this technology than anything else.” ~ Shane Liddell
Cryptocurrency began to get on Shane’s radar in 2016. He actually noticed similarities between Initial Coin Offerings and crowdfunding. These similarities allowed to him integrate cryptocurrency and blockchain into its services.
“If a market is to thrive and grow, then education has to place quite high on the list of priorities.” ~ Shane Liddell
Shane describes how many of the lessons he has learned from crowdfunding, affect how he handles cryptocurrency technology. One example of this is the lack of education surrounding crowdfunding at the beginning. Now that blockchain technology is emerging, Shane wants to ensure people are educated on the subject.
“The sole purpose of the Cryptoconomy Summit is to educate.” ~ Shane Liddell
Shane has attended many other summits, most related to crowdfunding. He wants the Cryptoconomy Summit to be different. He wants it to be community driven from within, not monitored from the top.
The one thing Shane wants people to take away is the ability to analyze how they can change their businesses to be more efficient. It will connect people from across many different disciplines.
What is cryptocurrency?
“Cryptocurrencies, in reality, are lines of code. Basically, a digital transaction that will run across the blockchain.” ~ Shane Liddell
Cryptocurrencies are a store of value, differing from that stored in traditional fiat currencies. The code can be sent between users and then converted to another asset, such as gold.
Blockchain: The Real Innovation
“What is Bitcoin? Bitcoin is a line of code. But the beauty is what’s beneath that.” ~ Shane Liddell
Shane describes the most fascinating part of Bitcoin as being the underlying blockchain. This technology creates a decentralized system where blocks are stored on nodes. Nodes are be any device used to access the internet. They store what Shane calls assets, which are any transactions, contracts, or other items stored on the blockchain.
“As more transactions take place and more blocks are built, each node that holds the copy of the blockchain is updated.” ~ Shane Liddell
This decentralization makes it very difficult for transactions to be modified or hacked. Shane describes how to hack just one block on the blockchain, a user would have to change at least 51% of the other blockchains.
The Effect on Business
“We’re still in the early adoptive phase.” ~ Shane Liddell
Shane brings up an example of how much more efficient and cheaper it is to use cryptocurrency over services like PayPal or Stripe. A $100 transaction using the Ethereum blockchain costs just $0.09 and would take just a few minutes. However, there is a delay in converting the cryptocurrency back to fiat currency.
“If we have a system in place to trade assets, and we have an average settlement on a trade of ten days. And now we have a technology that can reduce that to minutes in some cases.” ~ Shane Liddell
Shane notes that it is also important to analyze the dark side of cryptocurrencies. Of course there are bad actors in the industry.
“We’ve got a whole lot of problems too. It’s not a rosy garden.” ~ Shane Liddell
He also discusses a company that is using the blockchain technology to track a company’s supply chain.
“There’s a company right now that wants to put their entire supply chain on the blockchain. Let’s assume you go into the local steakhouse…and can see the entire history of that product.” ~ Shane Liddell
“It’s a delicate balancing act.” ~ Shane Liddell
There have been a wide variety of regulations passed around the world. Some countries, such as South Korea and China, have gone so far as to ban the use of cryptocurrencies.
“Whenever there’s a new way to raise money, we have to be realistic. We have the people coming into the space to scam, to rip people, and take their money and run away.” ~ Shane Liddell
Shane notes that the crowdfunding space had the same problem. Similar to cryptocurrency, the institutions that created them initially were not adept at regulating them.
“There are huge potential benefits to everybody across the world. Whether that’s the hungry people in Africa or to help people sitting in the corporate office.” ~ Shane Liddell
Shane also notes there is a lot of conversation going on as to what cryptocurrency is. This creates a problem in regulating cryptocurrency because the regulatory institutions aren’t sure how to classify it. However, he believes that the United States has done a good job in not immediately over regulating it. Shane does believe there should be adequate investor protections as well.
Regulating as an Industry
“What we need to do is put security in place as an industry to show regulators that we do care.” ~ Shane Liddell
To put the negatives in context, Shane draws from his crowdfunding experience. He discusses how crowdfunding companies originally took a very hands-off approach. They didn’t want to be responsible for negative transactions.
“If you have a client who launches a project, who is the real customer in that situation? Is it the project creator or the person who actually spends their money?” ~ Shane Liddell
Shane wants to have a productive conversation as an industry to determine the rules and regulations. It would have helped for the SEC to set a period to understand the technology, before they set up regulations.
What governments can do
“If we look at government applications, the sky is the limit. For example, keeping passport records on the blockchain.” ~ Shane Liddell
Shane describes how any centralized, ledger-based records can be transferred to the blockchain. He believes this technology will save governments, thus taxpayers, millions or billions of dollars.
The benefit, however, is not limited to governments. Shane often has businesses come to him asking how they can apply blockchain to their own business. They’re not exactly sure how to use it, but they want to learn.
The Impact on the Workforce
“One of the negatives of this technology is that it’s another form of automation.” ~ Shane Liddell
Blockchain technology will cut out middlemen jobs, which could result in job losses across the economy. Shane says this technology and industry is not leading to job growth, and that it is similar to the automation of retail.
“There is only one way to stop job loss, and that is to create more jobs within a technology industry.” ~ Shane Liddell
Shane and I discuss the balancing point between adopting new technology and saving jobs. Shane compares this to the rise of the internet in the early 1990s.
“Was the internet worth having? I think there are few people today who will say we shouldn’t have created it.” ~ Shane Liddell
You can find out more about Shane’s Cryptoconomy Summit here. They have diverse speakers from all over the world coming to discuss the new technology.
Bills with Luke Scorziell does not provide investment, tax, or legal advice or recommendations. This material is solely intended for educational purposes based on publicly available information and may change at any time. Additionally, this article’s content is a summary of the Interviewee’s comments and, while rephrased by the Author, are not from the Author himself.
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