The Great Disruption: Innovation, Digitization & Multiplicity of Value Systems
Welcome to Opalesque&’s 221st Roundtable – 18 million Roundtable PDFs distributed since 2008
Innovation in Fintech happens in many different areas, in things like payment systems, block chain, digital assets, robo-advisors, lenders, crowd funding, with a number of factors driving progress and new developments.
One of these factors is an improvement in algorithms, another one is hardware. Hardware is what makes the block chain possible, for instance. If algorithms have improved by a factor of ten, hardware has improved by a factor of a hundred. But the third factor is what&’s really driven innovation: data. If hardware has improved by a factor of 100, you could say that the availability of data has improved by a factor of 10,000.
But we should monitor innovation also outside of finance. One area that&’s particularly fascinating at the moment is deepfakes where you already can, for example, listen enjoy Frank Sinatra songs that Sinatra never performed. If you can imagine a deepfake in the financial world, it could create chaos like we&’ve never actually seen.
Ultimately, innovation is impacted by the underlying value paradigms. The new digital peer-to-peer environment allows new conceptualizations and expressions of value. While Bitcoin may not be the final answer for cryptocurrency it does allow us – even challenge us – to think and speak in terms of "extrusive" value creation as opposed to the extractive models that are winding themselves down in a changing world. When you get to this community or "human-based" value shift – here we talk about value extrusion or amplification – then you actually change the nature of money itself.
However, when it comes to the fiat versus digital currencies discussion, maybe it&’s not one or the other but both could co-exist, however within different domains and purposes. Digital exchanges, where this multiplicity of value systems can converge, are only going to grow in volume and relevance.
This Opalesque Roundtable, sponsored by BVI Finance, took place virtually with:
The group also discussed:
- Why the BVI is the sweet spot for the crypto sector at the moment (page 16). Why the BVI Incubator Fund enjoys massive traction with the hedge fund industry (page 11, 14, 20). The attraction of BVI Approved Funds for family offices and innovators (page 14) and Private Investment Fund regime for VC and PE (page 11)
- Understanding TikTok and the real reason it got into trouble in the US (page 6)
- The Digital Banking revolution (page 8-9)
- Usefulness and differences of Sandbox regulatory regimes (page 9-11, 13, 18). Which legal deficiencies should founders "clean up" before approaching any Sandbox? (page 10)
- The "real value" concept (page 9, 17) and why Bitcoin isn&’t the final answer for cryptocurrency (page 12). Why money will bifurcate into at least two distinct forms of value (page 15-16)
- How to avoid getting "Zuckerberged". Stay cautious: Many lawyers do not know how to protect the "real value" because they barely understand it (page 17)
- Innovation in startups vs. larger firms (page 13)
- Why the regulated world (and the tax man) struggle with decentralized offerings. Innovations with block chain-based KYC (page 18-19)
- How universities and research hubs can effectively de-risk innovation while protecting intellectual property for later commercial exploitation (page 20-21)
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