ASU Blockchain Research Lab Professor Talks DLT & Crypto to Wall Street
ASU Professor Says ‘ Blockchain Technology Is More Evolutionary Than Revolutionary’
The New York Stock Exchange has been developing an online trading platform that will allow large investors to buy and hold bitcoin. The plan, along with commodity exchanges now offering bitcoin futures, signals a shift from the financial industry’s pervasive mistrust of cryptocurrencies to a cautious entry into mainstream adoption.
Dragon Boscovic, a computer science research professor at Arizona State University (ASU) and also a director of the Blockchain Research Lab, a project that aims to further the development of blockchain-based technology applications. In his recent interview, he touches upon various topics. Some of them are listed below.
On New York Stock Exchange
Cryptocurrencies, while relatively new, are about a decade old now — within the normal cycle for any new technology to gain some traction. What we have seen over the past few years is that original cryptocurrencies like bitcoin did produce some additional platforms and networks that do not necessarily have the same objective as currencies tied to a country or consortium of countries. The industry now sees an opportunity to offer a new asset for trade, broadening choices for investors.
Traders have been looking into cryptocurrencies for some time now. From the investment perspective, cryptocurrency is considered an asset and as such, it is traded as a commodity. Just like we trade precious metals like gold or silver or platinum, we can look at cryptocurrencies in the same way. In other words, the NYSE now looks at cryptocurrency as an investment option in the same way it treats gold as a commodity.
Differentiating Between Traditional And Fiat Currencies
One key difference between cryptocurrencies and fiat – or sovereign – currencies, Boscovic points out, is the fact that crypto, unlike fiat, cannot be directly influenced by governments. He explains:
“The vulnerability of a digital currency is based on demand, and it is not open to influence by additional supply. A government can bootstrap an economy by introducing a new supply of traditional currency to influence borrowing. That can’t happen with cryptocurrency.”
From a consumer’s standpoint, cryptocurrencies introduce a new choice – an intangible asset which brings with it further investment opportunities.
Bitcoin VS Other Cryptos
Boscovic believes that the acceptance of Bitcoin into traditional investment instruments is also going to open the door to other cryptocurrencies. He explains that volatility of the digital currency is dictated by demand and therefore cannot be influenced by additional supply. Whereas, a government can introduce a new supply of traditional currency thereby affecting the market. To the consumers, cryptocurrencies create variety since it is an intangible asset which brings along further investment opportunities.
Boscovic predicts that Bitcoin’s acceptance into traditional investment instruments creates a pathway for other cryptocurrencies to follow suit. He explains that since institutional investors are recognizing this new asset as a valued investment opportunity, it will, in turn, encourage consumers and other small shops to start trading in cryptocurrencies. He concluded by saying that Bitcoins inclusion in the New York Securities Exchange offers a serious confidence boost to Bitcoin’s legitimacy.