The global shift in crypto, or: how i stopped worrying and learned to love the coin
By: Alex Romanov
Tags: Future, Finance, Blockchain, Technology, Vision

The global shift in crypto, or: how i stopped worrying and learned to love the coin Alex Romanov Jun 17·5 min read

This will be the first article of my blog, however for the last 4 years i have written dozens of articles and posts concerning crypto as an in-house analyst in various tech startups. And boy, do I have something to share it with you in this context, but: Everything written here is by no means financial advice and should not be considered as such.

For a long period of time only technical analysis was more or less applicable to what we call crypto trading. Today, however, we could think of it in terms of investing money as in penny stocks: high risk — high reward. TA worked pretty well for me, but the market always lacked fundamentals: some impact on our everyday lives from all of the projects that I believed in so much.

What was that shift I mentioned in the title? The real world’s businesses begin to pay attention to the sector which only 1 or 2 years ago was considered gambling or ponzi schemes rather than the central force of innovations which may in a few years redefine the global fintech landscape.

Why am I so optimistic about crypto in the long run? I can name a lot of reasons, and I will begin with what seems to me the most important:

Financial reason 1 — obnoxious KYC/AML policies of traditional banks . Well, try to make a crossboarder SWIFT transfer of, let’s say, 10–20k USD. This might seem a big sum of money for an individual, but it’s almost nothing in terms of an operational business. And believe me, you don’t want your transef to be blocked even though it’s completely legal and transparent. Traditional banks have the right to block any suspicious transaction for a couple of days. And now let’s imagine your overseas partner is waiting for your payment and stops the shipment untill the money is safe and sound in his pocket. Everyone loses money, the shipment is stalled, and you might even get some serious problems with your national regulator. Why? You sent the money abroad and received no goods in exchange, it seems like… you made an illegal withdrawal of funds abroad (e.g. in Russia it is a great problem). Double trouble. Go see for yourself: AML policicies are failing. Should I really name the perfect alternative or you already guessed what it is? If the transfer was sent via e.g. ERC-20 USDT, not only would be complete in 10–20 minutes, it could also be triggered by an IoT-tracking device on your shipment container. The money would be withdrawn from your account and sent to your partner’s account as soon as the container arrives onboard of your ship (according to the Incoterms FOB practice). No papers, no middlemen.

. Well, try to make a crossboarder SWIFT transfer of, let’s say, 10–20k USD. This might seem a big sum of money for an individual, but it’s almost nothing in terms of an operational business. And believe me, you don’t want your transef to be blocked even though it’s completely legal and transparent. Traditional banks have the right to block any suspicious transaction for a couple of days. And now let’s imagine your overseas partner is waiting for your payment and stops the shipment untill the money is safe and sound in his pocket. Everyone loses money, the shipment is stalled, and you might even get some serious problems with your national regulator. Why? You sent the money abroad and received no goods in exchange, it seems like… you made an illegal withdrawal of funds abroad (e.g. in Russia it is a great problem). Double trouble. Go see for yourself: AML policicies are failing. Should I really name the perfect alternative or you already guessed what it is? If the transfer was sent via e.g. ERC-20 USDT, not only would be complete in 10–20 minutes, it could also be triggered by an IoT-tracking device on your shipment container. The money would be withdrawn from your account and sent to your partner’s account as soon as the container arrives onboard of your ship (according to the Incoterms FOB practice). No papers, no middlemen. Financial reason 2 — global money laundering industry needs some new cards up its sleeve. We may see that in the near future not only El Salvador, but also Panama and the places alike will adopt cryptocurencies. Why is this topic so hot for these countries now? So boiling hot, El Salvador’s president wants to build a geothermal power plant to welcome miners all over the world so that they utilize only green energy (pun intended). Let’s dive into some details:

chart built based on the data from knoema.ru and statista.com

Even if we put aside that severe COVID-related decline of GDP in 2020, the chart may be interpreted as: Panama’s GDP growth rate is declining due to decreasing volumes of “suspicious” transactions in the national economy as the AML regulations become stricter.

What’s about El Salvador?

chart built based on the data from knoema.ru and statista.com

Well, it is not so clear due to lower impact of financial sector on the national GDP, however the main message is the following: these countries are looking for any ways to fill their economies with money. What can suit better than being the world’s biggest crypto offshore?

Technological reason 1 — the emergence of 5G networks and global satellite internet coverage. Imagine you have full access to your funds all over the world. The funds no bank can stop you from managing, with no middlemen and unnecessary fees. It’s like cash — it’s everywhere with you, only you know how much money you carry in your pocket. We are about to get this “features” of cash without its disadvantages: you can carry $1 or $1 000 000 in your pocket, nobody knows you carry it with you, no pickpocket can steal it from you for only you know the phrase/pin/or another means of securing your funds. It might seem a little bit naive now, but these are the features we always underestimate in managing personal finance.

Imagine you have full access to your funds all over the world. The funds no bank can stop you from managing, with no middlemen and unnecessary fees. It’s like cash — it’s everywhere with you, only you know how much money you carry in your pocket. We are about to get this “features” of cash without its disadvantages: you can carry $1 or $1 000 000 in your pocket, nobody knows you carry it with you, no pickpocket can steal it from you for only you know the phrase/pin/or another means of securing your funds. It might seem a little bit naive now, but these are the features we always underestimate in managing personal finance. Technological reason 2 (closely connected with reason 1 though) — the dawn of the Internet of Things. I don’t speak about refrigerators which order food for you or personal assistants in shape of a portable speaker. It reminds me of some early aircraft prototypes — a lot of hype with no functionality.

5G networks will allow us to stuff everything with sensors, ARM-based devices and microcomputers connected to the Internet ultimately creating more data and traffic than all the humans in the world.

IoT-based logistics triggering payments,

IoT-based insurance charging extra or lowering your payments if you drive carefully,

IoT-based monitoring infrastucture which can order some spare parts for an engine before it breaks, detecting any anomaly when it still runs and triggering payments for the repair, —

this is not some distant future. This global change is about to happen: let me remind you of NVIDIA & ARM merger, and the ongoing microchip deficit.

In my conclusion I want to be very concise:

While the majority of people go on with their lives and use “interfaces”, consuming goods and services like they were used to, “the backend” is rapidly changing.

Everything: from mining (traditional, not cryptocurrency) to production, logistics and commerce will adopt the new technologies over 3–5 years. Decentralized finances will become one of the cornerstones of the new technological era for 30–50 years to come.