Crypto Crash: “Bitcoin Will Rise Again Because Its Software Is Indestructible”

According to Julien Maldonato, partner at Deloitte France, responsible for financial services, innovation and Web3, cryptocurrencies should recover after the crash because the underlying technology, the blockchain, is revolutionary. This is the best in computer security, says the former mining engineer. Since the Pacte Act, brokers with PSAN (digital asset service provider) status, such as Coinhouse or more recently Binance, take care of the technical part (registration of new crypto holders in the blockchain) and offer their specific services. About 2 million French have already bought cryptocurrencies through them.

What is a cryptocurrency?

Before being an exchange currency, every cryptocurrency is the product of a blockchain. This technology is reinventing the entire Internet as we know it, with better storage capacities and perfect traceability. In fact, it is a network of machines that work together. The first blockchain, that of bitcoin, was created in 2009 and for this network to work, users were needed. These machines needed a local currency, tokens, to entice people to play a role in securing the network. Because the larger the user community, the more the blockchain becomes an essential place of exchange or payment.

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This is how bitcoin was born. Gradually, users realized that these tokens made it possible to pay each other in an efficient, secure and cheaper way. The bitcoin unit of account subsequently gained in value, moving from a few cents to over $30,000 per token.

Julien Maldonato, partner at Deloitte France, responsible for financial services, innovation and Web3

Julien Maldonato, partner at Deloitte France, responsible for financial services, innovation and Web3

@Deloitte France

In April and May, bitcoin lost more than a third of its value in a few days, and some other cryptocurrencies much more. Can they recover from such a crash?

The crash was quite systematic and global, many tech stocks also fell – I’m thinking PayPal that lost 65%, Netflix that fell 75%… This strong correction is related to valuations that had risen too high and too fast, due to monetary central bank policies and excess liquidity flooding the financial markets. This excess was forcibly corrected. Bitcoin has suffered because it is also used by investment funds which, with the volumes they handle, ultimately influence prices. In any case, this does not affect trust in the bitcoin system and especially not in its technical underpinning, the blockchain, which is the best in terms of computer security. Bitcoin will rise again as its software continues to run and it is indestructible. People continue to use this technology and that’s what makes it valuable.

You are convinced that cryptos will revolutionize the savings world. How ?

Like I said, they seemed to serve as local currency on the blockchain. But thanks to this technology, it is also possible to create other tokens that can have many other uses. The underlying asset can be an object from the real world, such as a financial security, or from the virtual world. On the blockchain, we can create deeds of ownership of anything and everything. The possibilities are unlimited. Suppose we create a “stone” token: instead of placing a building in real estate investment company (SCPI) shares, we sell it through “stone tokens”. This significantly reduces the number of intermediaries and therefore the costs associated with this type of investment, which are very high today (more than 10%). We can optimize distribution and management costs thanks to tokens and “tokenize” makes the sector more accessible. This happened on a small scale in 2019: Equisafe, a digital investment company, made its first real estate sale with this technique. For now, this remains very marginal, because the technology is in the hands of start-ups that do not have the firepower to force themselves into this very conservative market. If this technology makes it possible to reduce costs, then it is indeed the entire existing industry that loses profit…

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It’s a bigger revolution than the internet, you say?

Yes. “Tokenization” has made all underlyings, and in particular financial products, much more liquid. It is a bigger revolution than the internet because the blockchain knows how to manage property, which the internet cannot. With these new instruments we no longer need the multitude of current intermediaries. It is more efficient and cheaper.


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the work titled Christopher Donner

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