Cryptonomist interviewed Massimo Morini, Advisor to Cardano Foundation and Professor of Blockchain and Cryptocurrency at USI University of Lugano, about the future of technology, AI, and DeFi.
How do you see blockchain technology evolving over the next five years, and what role do you see your work playing in this development?
In the next few years, perhaps within five years, blockchain technology will need to fully come into its own in order to continue to grow. Truly decentralized and increasingly easy to use. As we scale up, the biggest risk is that we attract attention simply because we are on the edge of a regulated world. Salvation lies in its true nature. Bitcoin has continued to grow because it is truly decentralized and is used in unique ways to do just that.
Ethereum is even more interesting because it is taking advantage of increasing decentralization to create a new economy made up of DeFi projects and the technology that makes them scalable and secure, even at Layer 2. There is still much work to be done, especially on the governance front. For example, Cardano is working on moving towards decentralized governance. Cardano is walking this path with a determination not yet fully seen in other ecosystems. And for decentralized governance to work, participating users must understand the mathematical, technical, and economic aspects of the system they govern.
What are the most promising applications of blockchain and cryptocurrencies, especially in the context of the global economy?
Keep in mind that blockchain has no real clear distinction between technology, investment, funding, and applications. For example, a token is a unit of blockchain technology, a form of financing, an investment, and a tool that enables other applications from DeFi to tokenization. Now, I’m interested in how token growth is giving rise to DeFi, driving layer 2 growth, and inspiring applications where data and computation can be verified very efficiently. The world is currently facing one of the greatest opportunities in history: AI. Many people think that it is a big risk, but you need to understand in what sense it is a risk.
To me, AI is a risk in that it can become opaque, manipulated, and private. That could end almost everything we know. On the contrary, if it maintains transparency, verifiability, and objectivity, there is nothing to be afraid of. In the world of blockchain, there is only one technology that makes this possible. Homomorphic encryption, immutable ledger hashing, zero-knowledge proofs…they provide privacy and verifiability, protect against tampering, authenticate algorithmic steps, and even authenticate complex algorithms. can. Who knows if this will be a killer app… or maybe even a money-saving app?
Cardano is known for its sustainable and scalable approach to blockchain. Can you explain how these features differentiate Cardano from other blockchain platforms and what benefits they bring?
Cardano is best remembered for the privacy and scalability of its e-utxo system, or the inclusiveness of its staking system that allows anyone to participate at no cost to the environment. These are great qualities, and they have taken a lot of effort and still take a lot of effort. But I believe Cardano is much more than that. Cardano was born with a very clear and very honest plan. Recognizing the difficulty of bootstrapping every blockchain, we therefore aimed for transparent growth and began to truly decentralize consensus and succeeded within a few years.
Today, that is achieved through governance. During that time, resource management mechanisms have been algorithmic and parameterized to ensure consistent and reliable use of resources. This is almost unique in the history of blockchain and requires true decentralization. Cardano is now handing this living algorithm to the people who will have to take care of it in the long term: the users. And this must be done well. Cardano’s history is promising.
How do you think blockchain and cryptocurrencies can be integrated with traditional financial institutions? Are there any specific challenges that need to be faced?
The blockchain world and institutions must not miss the opportunities arising from the discussion on central bank digital currencies. If these are based on technologies that are compatible with blockchain, then integration will indeed happen and will happen more quickly than expected. Otherwise, integration will be delayed for years. But that’s only for a few years. Because if financial institutions forget that the idea of CBDC was born out of Bitcoin and propose solutions that are even more centralized than what they have today, they too have a huge opportunity.
Blockchain can increase the reliability and efficiency of banks while maintaining decentralization, and can provide citizens with the only form of digital money that can replace cash as part of a currency they want to control independently. Masu. Technologies that are too similar to traditional technologies and are also highly centralized will not be able to achieve these goals, even if properly managed by central banks and with bank participation. , it will actually increase systemic risk and somehow survive.
As a professor at USI in Lugano, what are the main challenges and opportunities in teaching blockchain and cryptocurrencies? What skills do you think students who want to pursue this field need?
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Blockchain is not a “” technology. It’s a series of disciplines. Mathematics of cryptography and algorithms, platform and programming techniques, game theory economics, markets, and accounting on distributed ledgers. It’s not easy to find students with this background or who are ready to acquire it. USI focuses on economics and finance on the one hand and technology and computer science on the other, and it has started very well in this respect. That way, any student can delve deeper into some areas and less deeply into others, adding more or less deep knowledge and other skills needed in community, communication, marketing, social studies, and law. Masu. But in this field, it’s important to keep an open mind, never be afraid of technology and evolving regulatory frameworks, and learn more, even if you can’t know everything. In fact, this attitude is stronger in blockchain than in any other field, and is one of its contributions to society and individuals.
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Decentralized finance is gaining increasing attention. What are your predictions for the future of DeFi and how do you think it will impact traditional financial markets?
Traditional markets have been stagnant for more than a decade since the Great Financial Crisis. For better or worse, they have lost the momentum they had when I entered the field pre-crisis. Technology is currently leading the charge, and in fact, the DeFi sector is the only financial sector that continues to grow and innovate. And it does so against all odds, without clear rules and without creating even half the instability that is almost normal in the financial world. It has been more than two years since the first, and to date, almost the only serious problem to occur around the world, FTX and other contemporaneous incidents. However, more than a year has passed since the four largest banks in history defaulted and only the central bank rescued them. This is not often talked about, but banks know they are signs that something is wrong, and they are doing more than meets the eye. But to this day, they cannot escape the security of a world where everything is over-regulated to ultimately be protected by central banks. Similarly, blockchain has struggled to give itself rules that can help the world understand why blockchain works better than traditional systems. At the moment, the two fields are communicating, but it is a dialogue between deaf people.
