Crypto is a "$278 trillion opportunity," says economist

28 Jan, 2019 | Updated: 28 Jan, 2019
by Will Heasman
Opinion
Crypto is a $278 trillion opportunity, says economist

Anya Nova is Power ledger’s blockchain economist, In a Medium post, Nova relates the potential impact of security tokens and their ability to turn the crypto space into a multi-trillion dollar industry and potentially transform the lives of many.

Nova recalls her childhood, growing up during the hyperinflation which hit Russia in the 1990s:

“The Russian government printed too much of it, and it devalued right before my eyes. I remember my mom sent me to buy a loaf of bread from a local store. I was standing there, cash in hand, trying to figure out how many notes I needed.”

As she relives the experience, Nova scoffs at the idea of Bitcoin (BTC) being referred to as immaterial, asserting that if any one of these naysayers ever held a “bundle of worthless cash” they’d feel the same about fiat.

“I hear people say Bitcoin will never replace fiat money because ‘it’s not real,’ but fiat money is somehow ‘real.’ This rings false to me,” she said.

Fast forward a number of years to the emergence of BTC and the multiple iterations of altcoins. Nova outlines the various crypto asset classes, from BTC, deriving its value from being alternative money to utility tokens, utilizing their utility for liquidity, and security tokens whereby their value is gained for the underlying asset.

Nova focuses more specifically, the rise of the security token offerings (STO):

“The real reason we are seeing the insurgence of security tokens is because the regulators, such as the SEC, are cracking down on projects that have not complied with the existing fundraising regulations,” Nova says, adding that STO’s are effectively “return to compliant ways of fundraising.”

However, in her opinion, the mere introduction of regulation doesn’t make it a “better investment” compared to the unregulated offering.

Nova continues to relay that “a good investment is one where the right team is solving the right problem, at the right time, regardless of whether the investment itself complies with the capital raising regulations or not.”

Nova says that while security tokens may well give rise to many “useless investments,” and may not democratize finance as many believe it will, it still has the potential to shepherd a massive amount of capital into the cryptocurrency industry;

“There is just so much to tokenise,” she says, “$217 trillion dollars in real estate, $55 trillion dollars in equities, $6 trillion dollars in gold.”

Harking back to her experience as a child, Nova ruminates on whether security tokens may have helped the countries botched privatization attempts and subsequent hyperinflation:

“Privatisation was fractionalization on steroids, an economic experiment on an unprecedented scale, where everyday citizens received certificates representing a portion of the national infrastructure …  privatisation would have been the best use case to demonstrate the attributes of transparency and immutability that we love in blockchain technology,” adding that “anyone with access to a blockchain explorer,” would have been able to verify these fractions were distributed among all citizens fairly.

“The promise of security tokens is that such episodes in our common economic history will never have to repeat,” Nova concludes.

Read more: The Winklevoss twins: Bitcoin, stablecoins, and the tokenization of everything; Is 2019 the year of the security token?

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