PKF launches the con­cept of Bit­pod

Malta took the bull by the horns and forged ahead in the sen­si­tive area of vir­tual cur­rency trad­ing when vir­tual cur­ren­cies were at their peak (Bit­coin peaked in 2017 at $20,236) even though larger coun­tries such as China and In­dia, and EU coun­tries, were

The Malta Independent on Sunday - - BUSINESS & FINANCE - Ge­orge M. Man­gion

But, of course, it is all a mat­ter of the early bird catch­ing the worm. This year, Bit­coin is mak­ing a shaky climb closer to the $4,000 mark, while the en­tire in­dus­try of cryp­tocur­rency is still reel­ing from hit­ting rel­a­tive new lows. Need­less to say, six years ago the ECB was rather scep­ti­cal of vir­tual cur­rency schemes, see­ing the glass half-empty rather than half­full. It is to be ex­pected that any con­ser­va­tive bank­ing reg­u­la­tor would take a cau­tious ap­proach to vir­tual cur­rency, but the com­mu­nity has learned some lessons from the painful birth pangs of the sec­tor.

There are a num­ber of early devo­tees who, with luck and fore­sight, be­came rich on hold­ing Bit­coin. Oth­ers were less for­tu­nate. Cer­tainly, mar­ket ob­servers hope that last year was only a year of cor­rec­tion and that from now on­wards we will see a rally in the sec­tor. A re­cently pub­lished A.T. Kear­ney re­port pre­dicts that: “By the end of 2019, Bit­coin will re­claim nearly two-thirds of the crypto-mar­ket cap­i­tal­i­sa­tion as alt­coins lose their lus­tre be­cause of grow­ing risk-aver­sion among cryp­tocur­rency in­vestors.”

Nev­er­the­less, the nov­elty that ap­peared 10 years ago in Ja­pan will not fade away so eas­ily. Last year, Malta be­gan to toy with the nov­elty of the blockchain tech­nol­ogy – one that gave birth and sup­port to vir­tual cur­ren­cies – and passed a num­ber of laws to reg­u­late the blockchain and its de­riv­a­tive ser­vices. As is al­ways the case, the ECB, banks and mone­tary in­sti­tu­tions are wary of the new chal­lenges of vir­tual cur­ren­cies but, in the same way that the in­ter­net was re­sisted in its early days, the crypto rev­o­lu­tion is here to stay.

Just pon­der how, since we left the Gold Stan­dard, we run bil­lions of trans­ac­tions in fiat cur­rency that are not backed by any in­trin­sic value yet we blindly trust such pa­per cur­rency. We know that, fol­low­ing a se­ries of quan­ti­ta­tive eas­ing prac­tised in the EU and the USA, this ex­er­cise has led to the print­ing of bil­lions worth of new pa­per cur­rency by cen­tral banks to calm the mar­kets and wipe off ex­cess liq­uid­ity by buy­ing gov­ern­ment bonds and other se­cu­ri­ties. It is all a mat­ter of trust. Some may ask how blockchain tech­nol­ogy can re­solve this trust dilemma. The an­swer is that blockchain de­ci­phers the trust is­sue. Typ­i­cally, we ask our­selves five ques­tions: Do we re­ally trust the in­ter­me­di­aries? Do we trust credit cards? Do we trust that trans­ac­tions rep­re­sent real value? Do we trust banks? Do we trust our gov­ern­ment? With­out go­ing into the con­tro­versy that may arise from the an­swers to some of these ques­tions, we can do a re­al­ity check by say­ing that if and when cryp­tocur­ren­cies be­come main­stream, then trust peaks. We have all heard about Bit­Coin, Ethereum and other coin vari­ants that cur­rently form part of a pop­u­lar frame­work, yet there are many oth­ers.

Hav­ing just about ex­ploited the celebrity of blockchain, Prime Min­is­ter Mus­cat was eu­phoric in his New Year mes­sage say­ing, in­ter alia, that now we must switch our sights and try to scale the moun­tain of Ar­ti­fi­cial In­tel­li­gence (AI) – a sub­ject into which, in the USA and China, we find tech­nol­ogy giants pour­ing bil­lions of dol­lars an­nu­ally into re­search and de­vel­op­ment. Mind­ful of the le­gal and tech­ni­cal mine­field that lay ahead, the gov­ern­ment formed a com­mit­tee of ex­perts to help design and draft pa­ram­e­ters lead­ing to a safe frame­work and good gov­er­nance in the field of AI.

It is an open se­cret that the gov­ern­ment is keen to be seen help­ing in­no­va­tion and would like to see Malta be­come a ju­ris­dic­tion that at­tracts tal­ent from all over the world. Read­ers may ask how vir­tual cur­ren­cies can be­come main­stream un­less Fin­tech is at­tracted to Malta since, at present, banks do not sup­port Bit­coin – al­though ef­forts are in the pipe­line to at­tract new­com­ers. It is a clas­sic sit­u­a­tion where gov­ern­ments tend to put the cart be­fore the horse and then later, thanks to prac­ti­tion­ers, they go the ex­tra mile to cor­rect the po­si­tion.

PKF Malta is com­mit­ted to mak­ing an in­vest­ment to­wards em­brac­ing Blockchain in Malta. The in­vest­ment will be made in de­vel­op­ing Bit­pod, which will func­tion as a quasi­lab, com­prised of a live project ded­i­cated to fu­elling re­search and de­vel­op­ment with a spe­cial ac­cent on the emerg­ing fu­sion be­tween tech­nol­ogy and the fi­nan­cial world.

On the sub­ject of distributed ledger tech­nol­ogy (DLT) and PKF’s com­mit­ment to in­vest in this, the writer is of the opin­ion that DLT and vir­tual fi­nan­cial as­sets will play an im­por­tant role in the VR ex­per­i­ment. The Bit­pod ex­per­i­ment will in­clude a tech­ni­cal pub­li­ca­tion by the end of the year, which will be made avail­able to the pub­lic, lead­ing to a com­pi­la­tion of the find­ings, ob­ser­va­tions, con­clu­sions and re­sults. In ad­di­tion to the Bit­pod, com­ple­men­tary Bit­block ses­sions will present a se­ries of ad hoc work­ing ses­sions in a ca­sual for­mat, once again aimed at pro­vok­ing thought, ideas and novel dis­cus­sion with lo­cal as well as in­ter­na­tional pa­tron­age.

In con­clu­sion, the im­por­tance of hon­ing and har­vest­ing re­search and de­vel­op­ment in an in­ter­na­tional fo­rum can­not be stressed enough in our na­tional am­bi­tion to ser­vice a cen­tre of ex­cel­lence, within the ad­vanc­ing realms of ro­bot­ics, AI and all forms of rev­o­lu­tion­ary liv­ing.

We have the in­ten­tion and we now also have the law, but we still have a long way to go be­fore we can con­fi­dently say we also have the cov­eted work­ing ecosys­tem. PKF com­mends the good work and in­vest­ment be­ing done by the Gov­ern­ment and en­cour­ages the pri­vate sec­tor to fol­low suit on this re­mark­able jour­ney that prom­ises to make its mark in­deli­ble.

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