Emin Gün Sirer, associate professor of computer science at Cornell University, appeared on the Decrypt Daily podcast yesterday to discuss how COVID-19 has transformed the way we look at cryptocurrency.
The ongoing COVID-19 pandemic has caused mass economic upheaval, and crypto enthusiasts are looking on to see what role crypto assets can play amidst this period of global uncertainty. As people look for new ways to invest and do business from home, Sirer said crypto is poised to make an impact—on the back of an unprecedented year.
“We’re living through an exceptional time, we’re going to see a bunch of macro trends come in and affect the crypto space quite significantly,” Sirer told Decrypt.
One of these macro trends is inflation. According to Sirer, major economies across the globe have no choice but to allow for inflation. “They have to come in with a credible threat of inflation or else money will sit on the sidelines,” Sirer said. This doesn’t come as a surprise, as Fed Chairman Jerome Powell announced a new approach to inflation that can allow for rates higher than the traditional two percent level.
As inflation rates continue to rise, Sirer says consumers will feel the need to spend their cash before its value depreciates. This, in turn, means that people are looking for alternative investments, including crypto.
“It’s not only a different kind of asset, it’s not only decoupled from the motion of other assets, but also it could have its own intrinsic value as the foundation of a new economy,” Sirer said.
As the COVID-19 crisis continues, these macro trends also have the potential to also transform the use and promise of blockchain technology. “I think blockchains are going to completely revolutionize the world and not in just some kind of superficial back office way, but in a way that impacts everybody,” Sirer said.
This revolution can mean a scaling back of third party intermediaries that control the world of finance as it currently stands, such as when an individual tries buying stock certificates or investing in a company.
“The fact that people are cooped up in their houses, and the fact that we have to carry out many of our functions online has renewed interest in blockchains and cryptocurrencies,” Sirer added.
That and supposedly an impending apocalypse.