Crypto – a truly decentralized system that works

We know it as a buzzword for quite many years already, but what crypto actually is?
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Is cryptocurrency gambling? Is it here to stay? Is it our opportunity to get rich? Or have we missed the boat already? Things we don’t understand, especially new technologies, have a tendency to seem dangerous and risky to us. That’s only human. But because blockchain and crypto have now been with us for more than a decade, we decided to shed some light on these topics. Helene Panzarino, moderator of our Banking on Air podcast, welcomed David Stancel on our latest episode. David is our residential cryptocurrency expert here at Vacuumlabs, and CTO at Fumbi. In this episode, Helene and David discuss and explain the basics of blockchain and cryptocurrencies, and how this technology actually works.

So how did get David involved in the crypto space?

“Since 2013, I’ve been studying Bitcoin and the many other cryptocurrencies that emerged after Bitcoin. And because they really represent a relevant alternative financial system to today’s legacy financial system, it’s been a hell of a ride.” – David Stancel

Did you know that the first digital currency was developed in 1990? But it failed, along with a handful of other following attempts to create fully digital currencies. It took almost 20 years till Bitcoin was created and digital currencies became something that could be used in real life.

“It was clear that if we should have a successful and truly digital currency that is native to the internet, it needs to be decentralized. We cannot have a digital currency that is controlled by a central entity, whether that is a company, a foundation, an NGO or something else. We cannot have this single point of failure. It needs to be decentralized. It needs to be resilient to all kinds of attacks, including regulatory attacks and cyber attacks as well.” – David Stancel

So how do cryptocurrencies work when compared to traditional systems?

“Usually, you have a central company that has some data centers and some servers that they’re administering and are in control of. Because they fully control everything, they can make sure that all the rules apply. The beautiful thing about digital currencies and cryptocurrencies is that there is no such entity in those networks. Anybody can join the network, which means that you basically download the software to a computer and you can run it on your computer directly and there are thousands of other people doing the same thing. It’s a very live and organic system.” – David Stancel

If a blockchain is such an open entity, is it then actually trustworthy?

Of course, there are more open and less open ecosystems. And of course, attacks are possible in the network. However, they are unsuccessful because thanks to the way these networks work, they are able to defend themselves.

Cryptocurrency as a storage of value

People are also usually afraid of the quickly changing value of cryptocurrencies. But if we take a look at real currencies such as the dollar, its value is not stable either and the future of the dollar is very questionable now. Let’s consider that every fifth dollar that is currently in circulation, was printed last year. That’s scary, isn’t it?

“And that’s why we’ve seen lots of not only small, but also institutional investors really deciding that they want to keep some of the cash reserves they have in Bitcoin and not in dollars.” – David Stancel

Bitcoin has a fixed monetary supply. It has a set number of units that will ever be minted, so the amount of Bitcoins in circulation cannot be changed in the way that the dollar supply can change – by printing more and more banknotes.

Of course, there are also different cryptocurrencies than Bitcoin.
Actually, there are hundreds of cryptocurrencies. Bitcoin is considered as a first generation blockchain, while Ethereum is the second generation of crypto.

“Bitcoin was designed for really moving and storing the value on the internet and making some simple financial transactions. Another generation is Ethereum, which was designed as a truly global computer where you can basically program and upload any kind of applications and you can do much more sophisticated transactions. Basically anything can be programmed there. That’s why we have seen a wide spectrum of thousands of decentralised applications – DApps – that have been deployed on Ethereum and that helped it grow in the past years.” – David Stancel

And of course, that’s not all there is to it. If you want to hear more about crypto, stable coins or regulators, listen to our new Banking on Air podcast episode featuring David Stancel from Fumbi – Available on Apple Podcasts, Breaker, Google Podcasts, Overcast, Pocket Casts, Spotify or here:

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Here’s a rundown of this episode:

  • 04:20 How did David got involved in the space
  • 06:20 Currencies before Bitcoin
  • 09:50 Centralized and decentralized, open and closed
  • 14:00 Value of Bitcoin
  • 18:40 Bitcoin and Ethereum
  • 22:30 Stable coins and regulation in the crypto
  • 26:20 NFT

David studied Economics at Masaryk University in the Czech Republic and did his Master of Science in Digital Currencies at the University of Nicosia in Cyprus. He co-founded Blockchain Slovakia – an NGO focused on education, research, and policy advocacy in the area of cryptocurrencies and blockchain technology. David also lectures courses on cryptocurrencies at the Slovak University of Technology and the University of Economics in Bratislava, and he regularly speaks about cryptocurrencies on conferences, seminars, forums, universities, etc. He has been consulting multiple crypto-related startups and initiatives all over Europe, and currently serves as CTO at Fumbi Network. He writes regularly about the development of the crypto world in his newsletter –

‘Banking on Air’ is the official Vacuumlabs podcast covering the challenges, opportunities, perspectives and opinions that matter to you and to our community. In this podcast, we are looking under the hood of the changing face of tech: the acceleration in all things digital, the impact of regulation (and disruption), the need for genuine collaboration – and the specter of competitors old and new as it plays out in fintech and financial services around the world.

This podcast is brought to you by Vacuumlabs – and we’re sharing our experience and expertise in creating solutions for the digital journey for professionals, community banks, and fintechs. We believe that the future is in communities when it comes to digital transformation in financial services, and we invite you to join us and our guests over the coming weeks and months.

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