Interview with Geir Solem, Cryptor Trust
Geir Solem is the founder and Chairman of Cryptor Trust Inc. group of companies and Chief Editor of Bitcoin Investor. Geir is also the founder of Elliott Wave Technician and Cornupia Capital Ltd. He is also President of the Cryptor Foundation. His specialties include analysis of the financial market using demographics, economic cycles, and Elliott Wave theory / technical analysis. Geir focuses on investment in long term trends around the world. He engages in trading of commodities, bonds, stocks, and currencies.
About the Cryptor Trust Group
Cryptor Trust is the first and still one of the few investment groups in the world to introduce a formal capital structure based on Bitcoin, holding Bitcoin and blockchain related investments as its main assets as well as expanding into distributed, blockchain based finance.
Influences of Cryptocurrencies and Blockchain Technology in a Disintegrating Debt-Laden Fiat Currency System
GCV: What are the elements and/or characteristics that will define the Fourth Industrial Revolution?
GS: Billions of new people connected by mobile supercomputers, with a storage capacity and access to knowledge not seen earlier in human history, will be multiplied by emerging technology in fields such as artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing.
GCV: Klaus Schwab, the Founder and Executive Chairman of the World Economic Forum, stated in his article The Fourth Industrial Revolution: what it means, how to respond that the Fourth Industrial Revolution will have effects on customer expectations, product enhancement, collaborative innovation, and organizational forms as a result of new business models. How will cryptocurrencies and blockchain technology, once they are more widely accepted by the banks worldwide, affect the outcome of these four effects on society and business?
GS: They will facilitate the effects by providing lower cost, speed, trust, and reliability. However, this is not related to the banks as such, as they more or less will disappear in their current form and shape. The reason is that it is impossible for most banks to adapt due to their existing cost structure, the number of employees, regulations, and interference from the authorities. Notice that this is not only a matter of using new technology as those expensive bank buildings, all those expensive employees, and their old computer systems are not needed anymore to facilitate banking and finance in the post cryptocurrency blockchain world. Over the next few decades, you will see banks shrink dramatically and I predict that in the western world most of them will go under.
GCV: In your opinion, what ignited the Fourth Industrial Revolution and when did you decide to be a pioneer by offering guidance to people who want to invest in blockchain related assets using Bitcoin?
GS: The Internet was the basic platform that made the Fourth Industrial Revolution possible. You could say that digitalization, cryptocurrencies, and the blockchain were layers built upon the Internet. When we discovered Bitcoin, we understood this was a new beginning that opened endless opportunities in banking, finance, and commerce on a global scale.
GCV: Will cryptocurrencies and blockchain technologies empower people and if so, how will it encourage growth on a large scale?
GS: They become their own bank and have full control of their own money which is very powerful.
The main global effect on growth will be more liquidity, diversity, and a substantial increase in the number of various participants in all sectors of the economy.
Here are a few examples:
In manufacturing, the trend will be towards local production. In the future, you will print out your new mobile on a 3-dimensional printer and download the software. You will, of course, be able to choose or create the design of the mobile phone yourself.
In the stock market, there will more investors, listed companies, advisors, analysts, etc. It will also create new stock markets, especially in the 3rd world. Businesses in the 3rd world will have easier access to capital. The barriers for new companies to be listed and investors to invest will come down.
GCV: How will the Fourth Industrial Revolution shift the world inequalities to more equitable empowering options for the masses?
GS: In short, low cost super mobile smartphones, free Internet, digitalization, open source technology, cryptocurrencies, and the blockchain, all contribute to a worldwide leveled playing field. In the capitalist world, the cost of service and production is falling towards zero. As the world goes digital, a whole ecosystem becomes available over the Internet to everybody worldwide at almost zero cost.
GCV: It is predicted that the sharing economy will shift the power from institutions to individuals and communities. How will cryptocurrencies and blockchain technologies assist in the economic transformation using this type of collaboration?
GS: Together with a distributed commerce peer-to-peer network makes it all possible by facilitating the shift
GCV: How will the redistribution and decentralization of power and new technologies affect the way we do business? What kind of role will cryptocurrencies and blockchain technologies have in this paradigm shift?
GS: The unbanked now get an opportunity to have a bank account in the form of a digital wallet, doing affordable cryptocurrency transfers for purchases, savings, and investment. Until now the traditional banking system has been too expensive and bureaucratic for them. The fences/barriers are coming down and a door is open for them to enter. This means the 3rd world will fully enter the digitizing global economy. The digitized global commerce will be open for everyone.
GCV: What kind of effects will the Fourth Industrial Revolution have on the working poor, poverty stricken, numerous people without bank accounts, and the quality of life in general for the global population?
GS: Digitalization of the economy makes the entry point to join the global economy close to zero and the cost of acquiring goods and services more or less free.
GCV: Will supply and demand requests change as cryptocurrencies and blockchain technologies become the norm?
GS: Because of better availability of digitized service and goods, as well as the cost of service and goods falling towards zero, the demand will increase enormously especially from the unbanked of the 3rd world. Most of these people have limited access at present.
GCV: If cash is removed from society like most of it was in India, will it pose problems for the masses who are illiterate and do not use technology? Will cryptocurrencies and blockchain technologies bridge the gap and if so, how?
GS: The government restrictions will create problems for many people including possible ruin for those trying to save themselves without access to technology. The government of India is fully aware of the consequences, but still implemented the restrictions on the Rupee. I expect much more restrictions and regulations will occur when it comes to fiat currencies around the world as the global debt bubble implodes.
Cryptocurrencies and the blockchain are the escape route out of this regulation nightmare. It will be very difficult to enforce capital control restrictions on cryptocurrencies.
The Bitcoin/blockchain network is an encrypted, distributed, peer-to-peer outside the control of the government. It is not controlled by anyone. Cryptocurrency/blockchain networks live on the global computer network and are not possible to shut down meaning the blockchain network is not hosted in a single place where you can shut it down.
GCV: What do you perceive is the cause that ignited the shift from a debt-based system established by the fiat currency to an equity-based system created by cryptocurrencies such as Bitcoin and blockchain technologies?
GS: Technology made it possible and the abuse of the old debt system is the catalyst towards cryptocurrencies.
GCV: How will a decentralized currency affect the definition and operation of nations?
GS: Bitcoin is backed by no government, rather, it’s distributed across the entire network of users where its roots are in complex digital mathematics. This makes the currency immune to manipulation by politicians.
Because Bitcoin is untouchable by the nation-state, politicians will in the future struggle to extract tax revenues and penalties from their citizens in order to pay for the state’s ever bloating expenses and programs. Less revenue will, of course, undermine the nation state over the long term.
However, there are other forces than the currency that influence the future of the nation-state. Declining societies are fear driven and will tend to be more nationalistic as a way of finding ‘safety’. I would expect the declining western societies to become more nationalistic, and in practice, this would include exiting the European Union and possibly the break-up of European countries like Spain, the UK, France and Italy.
There are dangers for nations that put restrictions on the Internet in order to stop cryptocurrencies. Since Bitcoin is the money of the Internet, they could become isolated from the rest of the Internet economy or lagging in development. I would call these countries the ‘next’ 3rd world.
GCV: How will access to funds with purchasing power for new consumers affect the global economy?
GS: It opens the door for those without bank accounts to participate in the global economy making the world economy to scale much bigger. However, since much of that growth will come from the informal workers and businesses in the 3rd world it will not all be officially registered in the formal economy. OECD estimates that the world’s largest economy in 2020 will be the global ‘informal’ economy where ⅔ of the world’s workers actually work. This part of the economy will be booming and a substantial part of the wealth creation will happen there.
GCV: In other words, there will still be a shadow economy even with Bitcoin and blockchain?
GS: Yes, and the reason is how you define shadow and formal economies. Politicians will more often than not define economies outside their control and will as illegal. Think about it, politicians define two-thirds of the world’s workers as ‘criminals’.
I say really? The government controlled economy formal economy includes the world’s largest arms dealers like the U.S, Russia, China and France just to mention a few. On the top of it, the big arms dealers are very active running proxy wars around the world.
Politicians are also responsible for creating economic systems that close the 3rd world out of the formal economy and thus contributing to poverty.
GCV: What are the top pros and cons of cryptocurrencies and blockchain technology in a Fourth Industrial Revolution?
- You become your own bank, with no restrictions and parenting
- The government cannot take your money through confiscation, devaluation, and regulation, etc.
- Save money and time as cost goes towards zero for service and products and they become available digitally over the Internet
- Protection from payment fraud and identity theft
- Direct settlement (no intermediates) and direct access to markets
- You depend on technology that works. Wars, natural catastrophes, terrorism, etc. will continue and computer systems could be down for short or long periods of time.
- You need basic skills about technology as well as access to the Internet and devices.
- Cryptocurrencies still have a way go before they can replace credit cards and traditional currencies as a tool for the global economy. The timeline for widespread use will likely be over the coming decade.
- Lack of awareness and understanding as many people do not know how cryptocurrencies work and/or are not used to using cryptocurrencies.
GCV: What will be the future of work and wealth in the Fourth Industrial Revolution and how will cryptocurrencies and blockchain technologies facilitate the process making it easier to attain both?
GS: This will lead to more independent workers and entrepreneurs as the doorkeepers like banks and other institutions are bypassed with favor given to peer-to-peer markets based on digital currencies and a digital economy.
As “crowd-based capitalism” or the “sharing economy” expands, we’re taking economic activity out of institutions. In the established old model, most economic activities were controlled by large companies and institutions.
Now we have a digitally controlled model, a platform that sits between people directly. New technologies based on the blockchain and distributed network make people trust each other enough for these interactions. The sharing economy is all about people and trust. People are once again being drawn closer together on a global scale. This is the melding between commerce and community. You could say it is a democratization of opportunities.
Cryptocurrencies and the blockchain make it all possible. The blockchain is a shared, trusted ledger that everyone can inspect, but which no single user controls. Bitcoin’s blockchain ledger prevents double spending and keeps track of transactions. It is what makes possible a currency without a central bank. The trust and value are built into the system.
Go to Part 2
Outlook for Bitcoin Investment, Implications, and Trends Forecasting