Anthony Pompliano delves into the three core concepts of crypto

11 Mar, 2019 | Updated: 11 Mar, 2019
by Richard Allen
Opinion
Anthony Pompliano delves into the three core concepts of crypto

Anthony ‘Pomp’ Pompliano, co-founder and partner at Morgan Creek Capital Management recently highlighted the three core concepts of crypto.

In a piece he wrote for his Off The Chain podcast, Pomp draws attention to the three core concepts of cryptocurrency. He states that in this new world, we need digitally native assets, digitally native contracts, and digitally native accounting. All three are evolutions of traditional assets, contracts, and accounting, incorporating new technology to improve on the areas where their predecessors fell short.

Read more: 'The institutional investor is already paying attention to BTC and crypto'

As such, digitally native assets are bonds, stocks, currencies, or commodities that were born in the digital world and include a level of “programmability.” This allows for near-instantaneous settlement times, micro-transactions, low fees, and are compatible with the algorithms and machines that “will govern the automated world.”

Pomp goes on to explain that digitally native contracts, better known as smart contracts, are important for two reasons: 1) legacy contracts are too slow and incompatible for the algorithms and machines and 2) the automated world moves counterparty risk from humans to software.

Finally, Pomp adds that digitally native accounting may be the most important aspect. It’s a triple entry system that allows for both parties in a transaction to keep track of all the transactions within a system. Without this, we wouldn’t be able to use digitally native assets.

“We have to upgrade our assets, contracts, and accounting, or humans will continue to be the rate limiting factor of innovation and progress.” Pomp concludes.

Read more: Pomp, on JPM coin: it's a secret central bank, and we need to stop it

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