Bitcoin, blockchain and crytocurrency: what can we expect for the future of currency? We sit down with cryptocurrency specialist Neha Narula, Director of Digital Currency at MIT Media Lab ahead of her keynote at Telstra Vantage™ (#TelstraVantage) to explore her views on the potential of digital money. Neha is one of the foremost thinkers on the future of cryptocurrency and blockchain, whose TED talk ‘The Future of Money’ has been viewed over two million times.
Ahead of the event, Neha shares her insights into the true value of modern currency, the potential of Bitcoin and digital money, as well as humanity’s complex relationship with money.
You talk a lot about the history of money – from the Yap in Micronesia to Europe in the 1930s. What does the history of money tell us about the future of currency?
Looking into the history of money is helpful because it adds perspective – oftentimes we forget that things haven’t always worked the way they do now, and so it’s not only possible that things will radically change in the future, it’s inevitable.
I like the story of the Yap in particular because it really gets across this idea that money is a social construct more than an objective thing and starts to hint that it’s based on a mental “ledger” recording who owns what. Once people grasp that idea, it’s easier to jump to the idea of a blockchain, which is just a ledger in another form.
How does technology shape our relationship with money? For example, with programmable currency?
I think it’s useful to think about the progress of the Internet, and how it changed our relationship with data. The Internet completely changed the way we produce, transmit, share, and consume information. That has had such far-reaching consequences – the Internet brought us entirely new ways to keep in touch and spread ideas, but it also brought us information overload and a mechanism for foreign governments to influence our elections.
Viewed through that lens, how might programmable money evolve? Making value transmission faster, more secure, and more seamless means we can more easily build new applications that take in and create value.
Cryptocurrencies like Bitcoin exploded recently from $0.01 to more than $15,000. What are the causes for the explosion of cryptocurrencies?
The public’s trust in institutions is diminishing. This is happening in all areas, including politics, journalism, law enforcement, and the financial system. Bitcoin and other decentralized cryptocurrencies are intriguing because there is no central institution controlling them.
They’re also just new and fun. It’s kind of magical to obtain Bitcoin and start playing around without actually signing up for anything. It’s also generational — millennials seem to be more comfortable and excited about investing in cryptocurrencies.
Although there was a significant rise in Bitcoin, there was also a lot of instability in cryptocurrencies. How do we ensure stability as more people trade with digital money?
There are a lot of people working on this topic. One major area of development and research are around so-called “stable coins.” These coins try to track the value of some other asset that is deemed to be stable, like the US dollar. They might do this via a complex algorithmic monetary policy, a market, or simply by keeping a lot of US dollars in a bank account and issuing a token 1:1.
I think eventually central banks and governments will issue digital currency directly. It won’t start with the biggest currencies like the dollar or the euro, but smaller countries will experiment. Once this starts to happen, we can leverage the benefits of programmable money with the monetary policy expertise of central banks.
However, I’d also like to note that there is no magic bullet – sometimes there are shocks to stability. On the news of Brexit, the pound dropped by 10% against the dollar.
What is the one learning you’d like your audience to take away about the future of money, and our relationship to it?
I’d like the audience to understand that this is not just about speculation, bubbles, dark markets, or making money – it’s about a new technology that could do for value what the Internet did for information. It’s about democratisation and access. The existing global financial system does not serve everyone. We need to change that.
Neha will be presenting the closing keynote at Telstra Vantage™ on September 19th. She will help you master the intricacies of how digital currency works within the context of a secure environment, so you can reap the benefits of the financial revolution.
Telstra Vantage™ will host over 6,000 attendees, 50 sessions and over 100 exhibitors for two captivating days of ideas and innovations. Check out the full Vantage™agenda and make sure to be the first in line to keep up with the latest event updates by following Exchange, and Twitter using the #TelstraVantage.