NEW YORK – East Mediterranean Business Culture Alliance presented Blockchain Bitcoin and Other Cryptocurrencies Panel Discussion: The Flight of the Eagle or Icarus at the 3 West Club in Midtown Manhattan on February 22. The thought-provoking discussion helped many understand the timely topic and offered an introduction to Bitcoin and Blockchain and other cryptocurrencies.
Master of Ceremonies, Lou Katsos, EMBCA President introduced the Moderator, James J. Gerkis- Partner, Proskauer and Rose, LLP, an international law firm. The distinguished panelists included:
Arjun Balaji, Chief Investment Officer, Shomei Capital, where he invests in both cryptoassets and early stage companies, deploying consumer and enterprise software to hundreds of thousands of users. An early investor in Bitcoin, Ethereum, he has actively written and spoken on the future of money. His primary interests are in cryptoeconomic incentive design and buildable scalable infrastructure in the ecosystem.
Steve Bregman, President and Co-Founder Horizon Kinetics. He is head of research, a member of the investment committee, and the Board. Bregman invests in and has published extensive research on cryptocurrency.
Steve Hatzakis, Global Director of Research, Forex and Crypto at ForexBrokers.com He is an active investor, researcher and consultant on to FinTech companies and contributed to self-regulatory initiatives to develop best practices for cryptocurrency market participants. Hatzakis is a CFTC-registered Commodity Trading Advisor and holds a series-3 license. He first wrote about bitcoin in 2013 and is interested in the socioeconomic impact potential of decentralized blockchain networks and emerging infrastructure protocols for web 3.0.
The panel examined three main topics: (1) the fundamentals of blockchain and cryptocurrencies; (2) investing in cryptocurrencies, exchanges and ICOs; and (3) challenges to widespread adoption.
With respect to the fundamentals, the panelists described how blockchain – a distributed, digital ledger that records transactions via a consensus mechanism such as proof of work – forms the underlying technology upon which cryptocurrencies are based. They discussed the different types of blockchains— e.g., public/permissionless vs. private/permissioned ledgers. By reference to how various forms of money have been used (and ultimately debased) throughout human history, the panel described the potential for cryptocurrencies to serve as a viable, and perhaps superior, alternative to centralized fiat currency.
With respect to investing in cryptocurrencies, the panelists noted that there are thousands of cryptocurrencies available for purchase today. While most of these cryptocurrencies are likely to fail, the potential upside for those (if any) that succeed would be tremendous. One panelist suggested that investors should address the (very) high risk/reward profile through appropriate “sizing” – i.e., only investing a very small amount of one’s funds available for investment, an amount that one can most certainly afford to lose. The panel also described the mechanics of investing in cryptocurrencies, whether through initial coin offerings (ICOs) or on an exchange.
The panelists then shifted to address numerous real and perceived challenges to widespread adoption of cryptocurrencies and blockchain technology, which include, among other things, the difficulties with: (1) the safekeeping (or having custody over) and securing digital assets (one panelist said to use an offline, hardware wallet (such as a Ledger Nano S) for maximum security, and to not keep more cryptocurrency on an exchange than you would cash in your wallet); and (2) the environmental costs imposed by proof-of-work mining. One panelist stated these concerns are overblown because (a) miners are incentivized to minimize energy expenditure by creating more efficient mining hardware, and (b) the trajectory of society’s ability to develop efficient computational processors may portend that a similar trend may very well occur here.
The panel closed with a final question to each panelist as to how they viewed the future of cryptocurrencies and blockchain technology. The general sentiment was one of measured optimism: While very real barriers to widespread adoption remain, the technology presents great promise on numerous levels.