Crypto-crash: “Bitcoin will rise again because its software is indestructible”

According to Julien Maldonato, partner at Deloitte France, responsible for financial services, innovation and Web3, cryptocurrencies should recover after the crash because the underlying technology, blockchain, is revolutionary. This is the best in terms of computer security, says the former mining engineer. Since the Pacte Act, brokers governed by the status of PSAN (digital asset service provider), such as Coinhouse or more recently Binance, take care of the technical part (registration of new crypto holders in blockchain) and offer their special services. About 2 million French people have already bought cryptocurrencies through them.

What is a cryptocurrency?

Before it is an exchange currency, each cryptocurrency is a product of a blockchain. This technology reinvents the entire Internet as we know it, with better storage capacity and perfect traceability. In fact, it is a network of machines working together. The first blockchain, bitcoins, was created in 2009, and to make this network work, users were needed. These machines needed a local currency, tokens, to entice people to play a role in securing the network. For the larger the community of users, the more the blockchain becomes an important place for exchange or payment.

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This is how bitcoin was born. Eventually, users realized that these tokens made it possible to pay each other in an efficient, secure and cheaper way. The Bitcoin unit of account then rose in value, taking it from a few cents to more than $ 30,000 per share. token.

Julien Maldonato, partner at Deloitte France, responsible for financial services, innovation and Web3

Julien Maldonato, partner at Deloitte France, responsible for financial services, innovation and Web3

@Deloitte France

In April and May, bitcoin lost more than a third of its value in a few days, and some other cryptocurrencies much more. Can they recover from such a crash?

The crash was quite systematic and global, many tech stocks also fell – I think of PayPal which lost 65%, Netflix which fell 75% … This strong correction is related to valuations which had risen too high and too fast, due to central bank monetary policy and excess liquidity flooding financial markets. This profit was drastically corrected. Bitcoin has suffered because it is also starting to be used by investment funds, which with the volumes they handle, end up having an impact on prices. In any case, it does not undermine confidence in the bitcoin system and especially in its technical underlying, the blockchain, which is the best in terms of computer security. Bitcoin will rise again because its software continues to run and it is indestructible. People continue to use this technology and that is what makes it valuable.

You are convinced that cryptocurrencies will revolutionize the world of savings. How ?

I said it, they seemed to act as a local currency on the blockchain. But it is also possible, thanks to this technology, to create other tokens that can have many other uses. The underlying can be an object from the real world, such as a financial security for example, or from the virtual world. On blockchain, we can create deeds on anything and everything. The possibilities are limitless. Let’s imagine we create a “stone” token: instead of putting a building in shares in a real estate investment company (SCPI), we sell it through “stone tokens”. This significantly reduces the number of intermediaries and thus the costs associated with this type of investment, which today are very high (more than 10%). We can optimize distribution and administration costs thanks to tokens and the “tokenize” sector makes it more accessible. This was done on a small scale in 2019: Equisafe, a digital investment company, made its first real estate sale using this technique. So far, this is very marginal because the technology is in the hands of start-ups who do not have the firepower to impose on this very conservative market. If this technology makes it possible to reduce costs, then it is the entire existing industry that loses in profit …

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It’s a bigger revolution than the internet, you say?

Yes. “Tokenization” has made all underlying, and especially financial products, much more liquid. It’s a bigger revolution than the internet because blockchain knows how to manage property, which the internet does not. With these new instruments, we no longer need the many current intermediaries. It is more efficient and cheaper.


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