We discuss numerous justifications for why Blockchain technology would be highly conducive for the smooth functioning of today’s society. We provide several comparisons between cryptocurrencies issued by blockchain projects – crypto – and conventional government issued currencies – cash or fiat. We develop intuitive analogies – which are later supplemented with formal arguments – that helps us to understand the role of money in society and then to see how crypto can fulfil the functions of money, as we know it, in a better way.
We look at the origins of crypto-currencies and the evolution of decentralized finance. We consider how money has moved from being centralized to decentralized and how there are attempts to make it centralized again using blockchain technology. We discuss how crypto can be a remedy to several monetary maladies and the promise it holds for creating equal wealth generation opportunities for everyone. We discuss the evolution of trading facilities from centralized cryptocurrency exchanges into decentralized exchanges and later towards the creation of venues that act as a one stop shop for all financial matters, Super-Store Exchanges, or Special-Service-Exchanges.
We summarize seven fundamental innovations that would be required to make blockchain wealth management accessible and safe for the masses. The conceptual ideas we discuss outline an approach to: 1) Strengthened Security Blueprint; 2) Rebalancing and Trade Execution Suited for Blockchain Nuances 3)
Volatility and Variance Adjusted Weight Calculation 4) Accommodating Investor Preferences and Risk Parity Construction; 5) Profit Sharing and Investor Protection; 6) Concentration Risk Indicator and Performance Metrics; 7) Multi-chain expansion and Select Strategic Initiatives including the notion of a Decentralized Autonomous Organization (DAO).
Incorporating these concepts into several projects would also facilitate the growth of the overall blockchain eco-system so that this technology can – have wider mainstream adoption and – accomplish its potential in transforming all aspects of human interactions.
Ravi Kashyap is a Finance Professor at the Estonian Business School and University of Waikato Joint Institute at Hangzhou City University. He has taught finance, economics and blockchain courses at many universities in South Korea, Vietnam, China and Singapore.
Ravi has held senior (and pioneering) roles – as CEO, Head of Quantitative Research, Product Manager – at both traditional financial service firms and blockchain money management funds in New York, Singapore and Hong Kong, including Goldman Sachs, Morgan Stanley, Merrill Lynch, IHS Markit and Citigroup. He has experience setting the strategy for multi-billion dollar financial service divisions and product managing multi-million dollar quantitative products. He has developed and applied numerous machine learning techniques and related models for risk mitigation and wealth appreciation.
He moved to academia to focus on research regarding uncertainty, optimization and decision making.
He continues to be involved with the industry, on a limited basis, by advising efforts geared towards incubating artificial intelligence and working with several blockchain firms to develop innovative methodologies that can be applied to transform all aspects of human interactions.
His doctoral thesis from the City University of Hong Kong is about uncertainty and unintended consequences in life, financial markets and everything else. He holds a Master of Business Administration degree from the Leonard N. Stern School of Business, New York University and an undergraduate degree from the National Institute of Technology Calicut, India. He enjoys playing volleyball and skiing.
