Florian Rais on How Cryptocurrency is Disrupting the Global Financial System (HybridSummit 2017)


[Music] welcome [Applause] [Music]Thank you. I hope that, I hope that you had a greatday, it’s been a long time.I can see that you are some tired facesall over, that’s all right. You can have somerefreshing things. So I’m not going to followa slides because you know whatyou had a bit too many of those. WhatI suggest, why don’t I tell you a story andthe key storythat I want to tell you about isabout missing opportunity.And missing opportunity starts with mine.We’re sitting here in 1994, yes,I was actually in university at the time and suddenly comeup an email address. Nobody understoodand they didn’t realize, what am I going to dowith this email address, if anyway, the guy Ican send it to, is sitting next to me.Nobody had envisioned the impactit could have. Then came to techthe tech boom. All those companies no onereally understood what exactlywhat’s going on. What, how it would move to workbut it did and a lot of those, a lot of usa lot us,they missed on that. So when wethink about why the banks today, why thebanks are so afraid of what’s going on here.Why are they so afraid that they’regoing to lose their market, but you know what,all of us, any of us, we have a bankaccount or we have actually experienceda banking transaction at some pointright. Now imagine, from morningto evening, from birth to death,inheritance, children, education, house,banking is part of our life. And most of the time,most of the time they actuallydo nothing but they earn money. They earn moneyon our on our back. They earn moneyjust because they’re here and wedon’t have a choice. So guess what, now, we have achoice. Hybridblock which youhave been hearing from the whole thingis actually your entry to benefitfrom this and not actually to go out andforget or lose or miss out on this opportunity.So this is something that I would like to[inaudible] I’m not going togo through all the slides and all the pointsbecause you have heard overthe course of the day, you have heard manytimes why it is important to have aBitcoin, why is it important to participate,how efficient it will be.But my point is I want to reemphasizeone and one thing only, the momentumthat you have will be generated because banksand financial institutions arescared. You’ve heard in the press many times.How many times have you seen a CEO of abank starting with JP Morgan or UBS orCredit Suisse telling you that this is a bubbleand it’s not gonna last? How many timeshave you heard it? Many times. Do you know why?Well because banks in mostof the cases today, they are exactly likestars. They still shine but their deadalready, long time ago. But they stillhave you and me paying every monthevery day, every year, some money because wedon’t have a choice.So imagine something comesanything we do, buying, selling goods,trading, transactions, letter of credit,everything that we are doing is going todisrupt their cash cow business,Anything. Think of it, everything. You, you know, that —you are on youryou have a [inaudible] how would charge for the [inaudible]?[inaudible]Who makes a commission? The bank.You know you’re buying all of this, everything.Look at this.Every time bannks are in the middle, themiddle-man. Let’s not forget that,the middle-manLetter of credit, that’s a fascinatingsubject. I’m sure, you know,let’s imagine Kazakhstan mining toIndian buyer. You have a mine inKazakhstan, you have an Indian buyer.Banks will issue a letter of creditcharging commission to address thispercentage and percentage andpercentage on top of itmerging markets are suffering most of it,obviously. And then what, what is the roleof the bank?Are they miners? No. Are they buyers? No.They manufacture something? No, they don’t.They just facilitate and for this it’s going to costyou approximately 10%. 10% on amining contract just because it’s twocountries which don’t have a free tradingcurrency. It doesn’t make any sense,does it? No, it doesn’t. So again,loss, loss of revenues.On and on and on and you can go onacross the border, flow of money anything thatyou can think of, they’re going to lose their revenue.Because we are all, all ofus, we are actually the cash cow of theirbusiness model. This is notan idea, this is a fact. There areon the last mile in order to have themtheir business model and to make surethat they can make money still for theyears to come.Now look at this, crossbone the flow ofmoney. Cryptos are not safe, never besafer than having your money in a bank. Wehear it a lot. But let’s take anexample, you live in a country wherethat uses US dollars or Eurosor Sterling, if Sterling is any safe. But let’s imagineeverybody will say well my money isactually safer in my bank account becauseI trustmy bank. It could be Barclays, it could be anyone.I don’t trust anything else to hold my money.I don’t think if anyone is from Argentinaor Zimbabwe in the room. But let’s sayArgentina, who actually trusts their bank?How many time have they lost theirsavings due to hyperinflation,devaluation of money, lost, rebellion — name it.They have actually losttheir money many times in their lifetime.There is several countries listed here but theyare by definition, not the only one. Venezuelaand most of the African countries wherethey do not have a currency, they do nothave a money to protect their savings.They do not have anything thatcan prevent them from losing it all. So you willtell me, of course,no,no but hang on. They are using USdollars. Okay, you’re using US dollars.What does prevent any of those countriesto say technically we want to change theparadigm? You have, everybody has a mobilephone. Everybody has thataccess toInternet. When I say everybody,I’m pushing it a bit, okay. Everybody has amobile phone. What can prevent anyoneto stop transacting directly on hismobile instead of using theirinefficient currency system? Nothing.It will happen, it will happen and it happens. Soas a consequence of this, now let’s tryto imagine the flow of money.The possibility, the potential users thatare going to move fromtraditional way of transacting into possiblycryptocurrencies.[inaudible] as a name. You havebillions of people who have currentlyno real access to banksor no efficient banking access. Now imagine thatthis pool of money is actually going to moveinto the cryptocurrencies for basictransactions, for day-to-day transactionsyou know. Birth, buying stuff, baby food,trolleys, whatever, you need you cantransact now from your phoneefficiently without fearing that [inaudible] in Zimbabwewhen you have, they had to stop thecurrency because inflation was getting toohigh.Do you know that the Bank of Zimbabwehas issued, it’s actually veryfascinating, they have issued a onehundred trillion dollar bank note.If someone wants to be a trillionaire,you can have, you can have a Zimbabwe bonda note that will say a hundred trillion dollars.They had to stop the currency becauseit was going nowhere. So what do they do?Okay they use US dollars, fair enough,but technically what’s happened? You have tobring the dollars, you have to use them, you have todistribute, you have to feedthe banks, you have to fee the ATMs. It isnot efficient. So you’re talking about dozensand dozens of millions of people who could behaving an efficient banking systemon their mobile phoneimmediately with scalability, safetyand everything that comes with it. So thisis really the name of the game. Nowyou understand whybanks are frightened, I said that already.Now imagine people were asking we heard ittoday, where’s the Bitcoin going?20,000, 50,000, 100,000a billion, a zillion, a trillion, a shmillion, who knows.If someone knows, by the way,please pop in and tell me because I’llbe fascinatedto know. But look there is only, in my opinion,there is only one way to actually try to address thisquestion. We all understandthat if we areon a boat and there is limited supply of foodandwe are ten people on the boatand there is a certain number of pieces of breadwe’re going to start fightingfor it. We all understand that.Now there is acertain supply of coins and there will be more andthere will be constantly growing, companieshaving it. Let’s not judgethe quality and validity of their business plan.Let’s just imagine one thing, we all know banks.We all have a friend or we work in a bank.We have mutual funds, we have investment funds, We havehave everything. Pension funds. Thistrillion and trillion of dollarsthat are invested in classic insurance. Mostof you have heard aboutcryptocurrencies from recently, some very recently, some abit of the past. There is a general trendthat is absolutely obvious, is, and as abanker in the city, I can tell you onething, more and more people are asking,they’re very smart investmentadvisor who knows everything, how could Iget exposure into cryptocurrency? How canI benefit from the blockchain? How can Ihave an exposure?Whatever it is. What is the answer? Mostof the time is, I don’tknow, most of the time is I’m not an expert.So people have to dig. But one common lineone thing that isabsolutely clear ,there’s going to be some of thismoney trillions and

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