Back in March 2021, when Elon Musk threw the weight of Tesla behind Bitcoin, it generated headlines around the world. So did the reversal of that decision just a few weeks later. However, the level of media attention that the world of cryptocurrency is attracting often feels inversely proportionate to the degree of insight on offer. That’s why Future Says turned to Nikita Fadeev, founder of Fasanara Digital, a scientifically driven cryptoasset investment fund. In the space of a thirty-minute conversation with host Sean Lang, he shares fascinating thoughts and ideas on topics that include key trends shaping the crypto domain, what disruptors can learn from traditional financial institutions, and why youth (usually) beats experience in these uncharted waters.
Reflecting the dynamism of this unique financial sector, Fadeev explains how he moved straight from a university research project to a business start-up, under the wing of Fasanara Capital, a London-based alternative asset management company. Undoubtedly, this is an industry in which small and nimble wins. Paraphrasing Siimon Reynolds, ‘when they zig, we zag.’
Fadeev’s personal experience illustrates an important truth. Crypto is democratizing the financial sector at unprecedented speed. In his own words, ‘nobody has been doing this for years.’ Just as low code/no code tools are creating a new generation of citizen data scientists, so the advent of Bitcoin and a dizzying array of other cryptocurrencies is breaking down long-established barriers to entry. Opportunities that were once the preserve of a handful of financial institutions are now available to all. And the wider implications should not be underestimated. In early September, El Salvador became the first country in the world to accept Bitcoin as legal tender. The ensuing debate on the motivations and merits of that decision is on-going.
Volatility is also likely to remain the norm. So, while celebrating the rewards for innovation that are on offer, Fadeev also stresses the need for caution. Regular followers of the Future Says series will know that balancing risk and reward sits alongside democratization as one of the golden threads that has run through all our interviews with artificial intelligence (AI) experts. Clearly, that wisdom applies here too.
The environmental questions surrounding Bitcoin mining are also explored. In the opening episode of Future Says Season 2, Maria Axente referenced the work of Kate Crawford, author of Atlas of AI. That book highlights just how extractive AI can be, not just in terms of its carbon footprint, but also the wider consequences of the relentless demand for big data. An increasing focus on environmental issues is also characterizing the crypto boom. Fadeev acknowledges this, but believes there has sometimes been a tendency to default to the wrong conclusions. Citing research undertaken by the Bitcoin Mining Council, he emphasizes the extent to which Bitcoin miners are already using renewably sourced energy, and the scope for further progress here.
The issue of regulation, such as that recently introduced in China, is another area of uncertainty and potential risk. However, powerful forces continue to drive the market, with the pandemic fueling significant new growth. As governments worldwide pump vast sums of money into economic recovery programs, more investors are turning to Bitcoin as a means of storing wealth and providing exposure to innovation.
For all the heat and light that currently surrounds the world of crypto, the overwhelming message is remarkably straightforward. It’s also consistent with what we’ve already learned about AI and data science. Above all else, success here lies in an ability to embrace change enthusiastically, but with eyes wide open. What’s more, anyone combining these values with a healthy dose of creativity is likely to find a warm welcome within a community defined by openness and inclusion.
Click here to find the interview with Fadeev, catch up with all five episodes of season one, and sign up to be notified of new Future Says episode updates.