way to do this for a century now.While Keynesian theorists have fo-cused on government spending andinterest rates, monetarists have shownthat a) the amount of money in circu-lation really determines prices, and b)the future intentions of the centralbank can increase or reduce the rateof economic growth.The solution: we can automate cen-

tral bank monetary policy usingsomething called nominal GDP leveltargeting. The central bank should saywhat eventual outcome they wantrather than trying to adjust the vari-ous rates and instruments that con-tribute to what they want. NGDPgrowth incorporates both inflationand growth, so by maintaining a

steady rate of NGDP growth, a centralbank can provide just the amount ofstimulus or braking the economyneeds on a daily basis, giving everyonea clear signal that provides the bestsustainable growth rate for an econ-omy. By combining central bank digi-tal currency (probably on agovernment blockchain) with smartcontracts that implement NGDP leveltargeting, we will have an optimal so-lution for money in the UK with nomore recessions, ever. Isn’t that thekind of money we really want?At Pillar Labs, we do research on

macroeconomics, tokenomics, decen-tralized systems, governance, and newfeatures for the Pillar wallet which isavailable in App stores. Learn more atlabs.pillarproject.io and the Pillar Wal-let at www.pillarproject.io

Credit: David Siegel, Founder & CEOPillar Project in conversation withJames Bowater

Wirex is a UK-based FCA-regulated provider of a digitalmoney platform for

individuals and businesses. Theplatform is built on state-of -the arttechnology that integrates withcryptocurrency blockchains tofacilitate the everyday spending ofboth crypto and traditionalcurrencies, providing a trusted andcost-effective service for digital moneytransactions.In 2015 we created a stir in themarket with the launch of the firstever Wirex Visa card that allowedusers to convert and spend theircrypto anywhere Visa is accepted.We also introduced the world’s firstcryptocurrency rewards programme -Cryptoback™ - which pays card users0.5% back in Bitcoin on point of salepurchases. Unlike other rewardprogrammes, ours pays users in realmoney for them to use as they please.Our platform currently supportsBitcoin, Litecoin, XRP, Ethereum,Waves GBP, EUR and USD with manymore currencies in the pipeline.We place a lot of emphasis on the

fact that Wirex is not an ICO, we arebacked by reputable financialinstitutions, including Tokyo-basedSBI Group. We preferred to go thisroute because we wanted to offer themarket a tangible product rather thana promise. We are very proud of whatwe have achieved when so manycontenders in this field are stillstruggling to deliver viable products. We have spent the last four yearsbuilding our own secure software

we believe we are playing a significantrole in bringing digital currencies intothe mainstream. It has always beenour aim to bridge the gap betweentraditional and cryptocurrencies, andto integrate digital money intoeveryday life. Wirex will soon beadding accounts in over 25 differentcurrencies to deliver a truly bespokeservice that enables our users to payby Wirex with confidence . We are a looking forward to anexceptional 2019 as some of our long-term projects such as our businessoffering, and USA launch are comingonline in the first quarter.

About Pavel Matveev and DmitryLazarichevPavel Matveev and his co-founderDmitry Lazarichev brought Wirex to life inthe UK in 2014, after realising that it wasextremely difficult for the man in thestreet to spend their cryptocurrencies.Since then they have expanded theservice into Europe, North America,Canada, Singapore and Japan. Theylead a team of over 320 of engagedemployees, including over 180 highlyskilled engineers and developers basedin Kiev. Wirex are seen as a thoughtleader in the arena of mass adoption ofcryptocurrencies and the founders arehighly sought-after speakers atblockchain and payments conferencesaround the world.

22 TUESDAY 15 JANUARY 2019FEATURE CITYAM.COM 23TUESDAY 15 JANUARY 2019 FEATURECITYAM.COM

are the same: automate monetary pol-icy. Most central banks try to keep in-flation around 2 percent, yet theymanipulate interest rates to try tocounteract the business cycle, raisingrates when unemployment is low andlowering rates when unemploymentis high.Sometimes this works; usually it

doesn’t. History has shown that cen-tral banker’s expert judgment exacer-bates the business cycle more often

Since column last week, the Crypto markethad another flash crash on 10th Januaryand Ripple (XRP) has traded places (again!)

with Ethereum (ETH). At the time of writing thispiece there are yet more red candles on thetrading screen. Bitcoin (BTC) is down circa 12%over the past week trading at US$3,569.05, Ripple(XRP) too is down cicra 12% at US$0.3221 and worse Ethereum(ETH) down over 20% at US$117.61 with the overall Market Cap atUS$118bn (data source: www.CryptoCompare.com)

Ten years ago on the 9th January 2009 the Bitcoin networkbecame a reality when the first transaction took place betweenSatoshi Nakamoto and Hal Finney. In my view this was thedefining moment for the crypto / Blockchain world as it set thescene for the new Blockchain protocols and inevitableimprovements to and variants to the Bitcoin Blockchain.

The best known of the new entrants was Ethereum with theability to more easily create decentralised applications, smartcontracts and tokens giving birth to the majority of altcoins. Aswith all new technologies though there were bugs andvulnerabilities so it was inevitable that there were those whowanted to start from scratch having learned from the failingsand/or limitations of first and second generation protocols.

Charles Hoskinson was a co-Founder of Ethereum, providedwork and help to Ethereum Classic and is the Founder of Cardano.Uniquely in the space he has a broad vision based on his extensiveexperience to date. I once heard him say if Cardano forks he hasfailed. What is very refreshing about his approach is that he takes itas seriously as NASA would designing a manned spacecraft whererisk of life is ever present. Entrusting your wealth, your identity andeven your medical records to a Blockchain protocol, whilst not arisk to life, it is absolutely a risk to livelihood and reputation. Thelevel of detail and scrutiny with scientific standard peer reviewmeans that Cardano has been slow and methodical compared toothers but that’s a price worth paying if what is released isscalable, interoperable and sustainable with no vital flaws.

Changing tack somewhat, regular contributor Barry E James ischampioning the World First Initiative (seeworld1sttaskforce.org).He explained that “ten years on we’re notjust remaking the internet, money and markets - but our entireenvironment, our future. Disruption on an unprecedented scale. Ilooked at the work of governments and disruptors alike aroundthe world and saw that we’re set to miss a golden opportunity toreplace our digital ‘toll roads’ with public highways, open to all.But this is no-ones job! So concluded we need a taskforce toprovide for the thoughtful and purposeful introduction of thesefrontier technologies. To ensure that disruption is directed to thegood of mankind. Not just for profit, regardless of the true cost.Please do join us.”

than dampening it. The Great Reces-sion of 2008 was caused more by cen-tral banks doing the wrong thingthan an overheated housing market.However, Australia hasn’t had a reces-sion in 27 years, and it’s no accident:Australia’s central bankers do a betterjob managing their supply of money,adding more money when the econ-omy cools and reducing the supplywhen the economy heats up.People have argued over the right

Money is the lifeblood of soci-ety, yet few people reallyunderstand what money isand what it is not. Here Iwill explain why gold is not

money, why no cryptocurrency ismoney, and the best money we can getis central-bank-issued digital currencyrun by an automated central bank.Money is what you use to buy things,

keep to spend later, and to get a loanand pay it back. Banks do not magi-cally make money out of thin air -banks take collateral and monetize it,making hard assets liquid. Centralbanks do make money out of thin air.By adding and subtracting money,they can both stimulate the economyand maintain a good level of inflation.First, two definitions: Deflation is

when prices decline. If £1 buys 4 lol-lipops today but 5 lollipops tomorrow,many people will hold money ratherthan spend it, and that can bring aneconomy to a halt. Gold hoarding wasthe primary cause of the Great De-pression. Because deflation is so de-structive, most central banks todayprefer a modest level of inflation,which they adjust using variousmeans. A small amount of inflation,say 2%, doubles prices every 36 yearsand is a small price to pay to keep de-flation away.Gold has almost no intrinsic value,

certainly no more than platinum, butfor a long time gold and silver wereused as money until something bettercame along. There is a limited supplyof Gold. In any year, the most allmines can produce is roughly one per-cent of world supply. So when de-mand for gold increases, anythingpriced in gold goes down relatively,and when demand for gold decreases,prices must go up. As Hayek said: “...because of the increased demand forgold, the value of gold would go up;but that very fact would make it veryunsuitable as money.”Bitcoin, created by a person who cer-

tainly came from the Austrian schoolof economics, is a better form of gold.There is no reason why bitcoin (orZcash or DASH, etc.) should not replacegold as a store of value in the long run,and I hope they do. But all cryptocur-

rencies have the same flaw: they havea fixed or nearly-fixed quantity, andthat makes them equally unsuited tobe money. Suppose you lend a friend100 ether at ten percent interest. A yearlater, you get 110 ether back, but atthat time the purchasing power of theether may be half or twice as much -this makes it unsuitable for loans, asthe interest rate is negligible comparedto the exchange rate. Just because wecall them “currencies” doesn’t mean

they are money. They are not.Money is relative to an economy.

What functions as money in Icelandwon’t work in China. Whatever peoplesay about Brexit, most Brits are proba-bly happy to have pounds, rather thaneuros, in their wallets. The major cur-rencies are practical solutions thatkeep evolving and still need a bit oftuning to get right. There are differentsolutions for different currencies, butthe solution for the pound and dollar

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In association with

CITY A.M.’SCRYPTO INSIDER

Crypto A.M. shines its Spotlight on Wirex

@CityAm_CryptoE:CryptoInsider@cityam.com

JAMES BOWATER

PARTNER CONTENT

Our series on AI, Blockchain, Cryptoassets and Tokenisation

Our aim is to bringcryptocurrencies intothe mainstream and toassist people to spendcryptocurrencies as

seamlessly astraditional currencies

Security Token Offering (STO) in-vestor Mike Barrell says that secu-rity tokens represent “a massive

tidal wave of opportunity” for not justgeeks but those in the city in 2019.Now he’s putting his money where hismouth is as the founder of next week's'Security Tokens Realised' conferencein the city, bringing together the lead-ing minds in the field from the fourcorners of the planet.He also believes it is inevitable that such

token in their various forms, representingstocks, bonds and new instruments, willbecome a ‘New Normal’ for major banks,stock exchanges and the city – able toreplace traditional equity, bringingadditional liquidity. “We're talkinghundreds of millions which I think willquickly go to billions in terms of propertyportfolios and the tokenisation of existingfunds for example.”If this sounds just like insupportable

hype then think again. It's widely thoughtthat 2019 will be the year of the SecurityToken, for good reasons. An increasingnumber of people see this as a naturalprogression not just for ICOs but for themainstream too.

Of course there will be some of that,startups and early-stage companiesseeking capital, but the vast majority ofsecurity tokens, he believes, will becompletely different. And far easier tounderstand than all the ICO white papersand video pitches, because they will becoming from established companies. Sothey can be valued in established waysthat are familiar to those versed inbanking and private equity - without theneed to understand blockchain, tokens,and tokenomics.Which is why, he says, adoption will not

just be rapid and the pace rapacious butshortly the established banks and capital

markets will have little choice but to dive-in simply because the commodities inwhich they need to invest will be availableonly as tokenised securities.The conference is certainly timely and

promises to be a milestone, and possibly aturning point, in the rapid developmentof tokens and the adoption of blockchaintechnology as the means of choice to keepaccount and track ownership. Fosteringmore fluidly than ever before, at minimalcost. Microscopic cost when comparedwith more familiar digital transactions, letalone paper (which many of those digitaltransactions just ape).I asked Mike if this shift is really an

inevitability? "I think absolutely it's 100percent inevitable." He says. "The train's leftthe station. It's happening, and the eventwill be absolutely packed. We have 35different media outlets clamouring, allextremely interested - this is very, very hot.Because the market that's involved withsecurity tokens will rapidly go to Billions".Why? "Direct ownership” means there

aren't a lot of margins being skimmed offeverywhere on each transaction. Plus theremoval of most of the cost and frictionalso allows a kind of hyper-fluidity. "Thereare a lot of elements , not just one elementat play here. There's liquidity, there's costcutting, there's availability, there's accessto assets that people can't currently investin - including physical assets such asproperty and art. Plus it's a win-win thing;the person with the asset wins and theinvestor wins".If you’re in the city, says Mike “You need

to learn about this and you need to be partof it because it's happening.”

You can hear my full interview with MikeBarrell on ICOrad.io and more on theconference atwww.SecurityTokensDelivered.com

Dmitry Lazarichev, Co- Founder of Wirex

Pavel Matveev,Co- Founder of Wirex

We will have anoptimal solution for

money in the UK withno more recessions

One of the key features ofBlockchain is the concept ofimmutability. Once something is

written into the blockchain it cannot bedeleted or edited. It cannot bechanged. The immutable nature ofdata written into the blockchain is oneof the key differences betweenblockchain based data and data storedin a traditional database. But whyshould data on a blockchain beimmutable?

The first use of Blockchaintechnology is Bitcoin. Bitcoin requiresthat information written into theblockchain be immutable in order toprevent people tampering with theledger that records all bitcoin

transactions. Once a transaction hasbeen written into the blockchain it ispermanent. This means that no onecan come along later and amend ordelete that transaction. Thetransaction is immutable.

When it comes to using Blockchaintechnology for improving supply chaintransparency, it is also important thatthe data is immutable. When a recordis added to the blockchain identifying aspecific transfer of goods including theorigin of the goods and their quality,this record is immutable. It cannot beedited or amended and this reducesthe opportunity for fraud or corruptionand also provides a reliable audit trail.

What if you need to make a change

because some of the informationentered is wrong?

Immutable doesn’t mean correct, itonly means unchangeable. Sometimesmistakes happen and records have tobe amended. In the world ofBlockchain, records are amended byadding new records to the blockchainwhich identify that a prior recordshould be updated or possibly anadjusting transaction is added to theblockchain to allow for the ledger to becorrected. Blockchain allows forchange by adding new records ratherthan amending existing records.

And one last thought: Blockchains*can* be built to be fully GDPRcompliant in spite of this immutability.

Troy Norcross, Co-Founder Blockchain Rookies

BLOCKCHAIN PRINCIPLE:IMMUTABILITY

What is your is your blockchainstrategy? This is increasingly aquestion not just for banks and

Fintech companies but across the board.Both for established businesses and thosein frontier and sunrise industries.

"It won't affect us" leads inevitably tothe questions: Why? How do you know?On what can you base that? Especially inthe light of the likes of Kodak and theentire music industry who took a similarapproach with disastrous consequences. Ihappen to know this because in 1996 I wasin Nashville Tennessee talking to majorrecord company executives fully threeyears before the advent of Napster,offering them a paper exploring theremaking of the music industry andoffering digital models to renew andrevitalize building on the old to create thenew. As in Don McLean's now famouslyrics "They would not listen, they did notknow how". It was easier "to carry onregardless" hoping for the best.

Having lived through the first digitalrevolution which remade not just theworld of business but our entireenvironment it's far clearer that tech is nolonger just about techies, and technologywill continue to transform at a speed andin ways that can be beyond disruptive. Anexistential threat.

Blockchain technology is providing themeans to create new kinds ofinfrastructure, building trustworthysystems which effortlessly span continentsand the world. Integrated not separatefrom what is there already. With the rolloutjust the deployment of a dapp (distributedapp) to a million or even a billion phones.

Blockchain is the new spine which willsupport and help deliver securely a host offrontier and other technologies safely, atscale, increasingly at minimal cost.Affecting almost every industry on theplanet - and creating whole new ones.

Which is why the British BlockchainIndustry Association (BBIA) is embracingnot just Frontier Technologies, across theboard - including AI, bots and robots, IOTand AR - but each and every vertical,industry - seeking to support theirdirectors, strategists and managers.

Join us now atwww.BritishBlockchainIA.org, free untilour formal launch, to network with theminds at the forefront of this revolution,and benefit from understanding andinsights unavailable elsewhere.

insights unavailable elsewhere.

Barry E James is Founding Chair of theThe British Blockchain IndustryAssociation (BBIA)

THE INTERNET WON'TAFFECT US AT ALL

STOs Set to Take City by Storm?

platform with a team of 200 highlyskilled and dedicated IT professionals.Our in-house team means we candeliver new products and upgradesquickly and efficiently leading toreduced costs for our users. Thecompany currently employs over 320people around the world and we have

offices in London, Kiev, Tokyo,Toronto, Singapore and Atlanta.We are keen followers of trends anddevelopments in the cryptocurrencymarket and are regularly asked forcommentary and thought leadershipcontributions around the world. With2 million loyal users in 130 countries,

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