On Tuesday (October 11), Charles Hoskinson, Co-Founder and CEO of Input Output Global (aka “IOG”), the blockchain technology firm behind Cardano’s R&D, explained in an interview why he is very bullish on crypto in the long term.
His comments were made during an interview with Maria Bartiromo, the anchor of “Mornings with Maria”, on American cable TV channel Fox Business Network (FBN).
When Bartiromo asked Hoskinson for his current assessment of the crypto market and how he expected crypto regulation in the U.S. to change, the IOG CEO replied:
“It’s a tough market. The stock markets are down nine trillion dollars, and the crypto markets don’t seem to be immune to that, but, you know, I’ve been through seven boom and bus cycles in the last eight years. So, we’ve gotten pretty used to it. We’ve gotten used to volatility, but the fundamentals are still very strong.
“All the infrastructure continues to be built. There’s a lot of great exchanges doing wonderful things. A lot of good protocols doing things. So, like all things, it’s businesses as usual, and most the major actors are still building and still doing interesting things. So, I’m overall very optimistic in a long term, but it’s going to be a rough short term.“
Then, when asked about Coinbase receiving regulatory approval to operate in Singapore, Hoskinson said:
“Well, the United States has been very difficult, and as a result, a lot of crypto companies are going global and that ultimately it means they’re moving jobs and opportunities outside of the United States, and so unless and until that environment gets better, we’re going to continue to see this trend where American companies diversify, whether it be Ripple or Coinbase, and it’s just something that we’ve had to deal with. But overall, it shows you that the people at Coinbase and others in the industry are quite bullish and optimistic about global growth.“
Mitch Roschelle, who is the founding partner of Macro Trends Advisors LLC and who appears regularly as a guest on Fox Business, asked Hoskinson how cryptoassets would be affected by the slowdown in the global economy.
The IOG CEO replied:
“I used to believe that crypto would be counter cyclic and the place that people would put assets when they were fearful of the global economy, but so far they seem to be moving in parallel with tech stocks and some of the more standard equity markets. So that’s kind of a problem. But all things considered, I think that long term the crypto markets are going to decouple from the traditional marketplaces and have their own economy… and, you know, it’s probably going to occur in the next 24-36 months.“
Bartiromo then wanted to know how major blockchain upgrades — like the ones that Ethereum and Cardano have had recently — improve the ecosystem.
Hoskinson told her:
“Well, it’s just like many of the things that we do. We are a slow and methodical project…. Everything we do… is all about making things better, faster, and cheaper, and ultimately improving use and utility in the platform. So, Vasil was about 12 months of work, and we just got it out last month, and it’s really exciting to see that it’s caused a lot of great positive upgrades in our community.
“But more broadly, when we look at the cryptocurrency space, this is the the case. Most people are building, and while the macro environment is not so positive, the individual environment of each cryptocurrency, whether it be Ethereum with the Merge or Cardano with Vasil, is looking better and better every day, and we keep getting more capabilities… There’s great growth and everything from GameFi to metaverse to NFTs to DeFi. So, I’m very bullish in the long term.“
During an interview Hoskinson gave to Bartiromo on May 3, he explained how Cardano solves real-world problems:
“I’ve been in the space since 2011 and back in that those days, nobody cared about cryptocurrency. We were a very small club. We all kind of knew each other… Back in those days, we were just trying to solve the problem of email for money. We just wanted to be able to send value to people easily and without counterparty risk. And then what happened is people said ‘well, that’s a great idea, but we want programmability’…
“In 2013, I helped co-found Ethereum, and there we had smart contracts, and since suddenly we could do crowd sales and we could do NFTs and DEXes and all these things that you see today that are very exciting, but the problem with those technologies is they don’t really scale.
“When you start adding lots of users and you want to have a truly global system with millions — eventually billions — and solve real financial problems — whether it be microfinance in Africa or remittances in El Salvador or it be global trade or ESG compliance, these types of things, you simply don’t have the technology to do that at the scale of millions to billions of people.
“What I did in 2015 is I took a step back and I said, ‘all right, let’s start a company and do first principles research’. So we opened up labs everywhere… And we wrote 135 papers — mostly peer reviewed — and we kind of built out the scientific backend, the scientific layer at the industry. And then we took those papers and transformed them into high assurance code the, same type of code used for jets and for rockets… and we created a protocol called Cardano and launched in 2017.
“It’s been up since then. And we now have three and a half million users all across the world from Ethiopia and Burundi and Kenya all the way to the United States.“
Bartiromo the interjected to say “what an incredible success story”, and then proceeded to ask what areas blockchain technology could help the most.
“Anywhere where you have a consortium of actors who have to work together who don’t necessarily trust each other, but need to work together for the market to form is where blockchain is best at. It could be a voting system and you ask who counts the votes; it can be a supply chain system and you say who audits that to make sure it’s ESG-compliant or whatever your goal happens to be. It could be a medical record system…
“So, these are simple problems to state, but in collection because of globalization or because of lack of trust, they’re hard to solve. And usually we solve them by having a central institution, some bank or some body, and say, ‘okay, they’re in charge’. But by being in charge, they have enormous influence. We saw this with social media. For example, they control speech in certain cases. So what you can do with blockchain is remove that central party and then basically have a common logic and they all can work in a decentralized way instead.
“And that’s what our industry has been slowly doing. And we started in finance; that was kind of the first application. And now we’re looking at everything — healthcare, communications, telecommunications, all these different marketplaces.“