Each year, participants of EADA’s International Master in Finance attended electives in the strategic specialisations in the third trimester. The specialisations include 12 electives divided into three areas focus aras: corporate finance, investment banking and FinTech. Here we talked to Professor Joan Torras, who led the course Blockchain & Cryptocurrencies.
Professor Torras holds an undergraduate degree in Business Administration (Universitat Autónoma de Barcelona, Spain) as well as master’s degree in Finance (EADA Business School, Spain), Fiscal Law (Colegio de Economistas de Catalunya), PDG (IESE Business School, Spain) and Transformational Leadership (EADA Business School, Spain). He has 12 years of experience investing in real estate, biotech companies, startups, venture capital and financial markets, managing a portfolio of 300 million euros. He is also co-founder of Criptoconsult, a website with information about the world of cryptocurrencies, including exchanges, mining, participation in ICOS and Tokens. The content of Criptoconsult is designed to be accessible to a diverse public, avoiding the technical jargon that gets in the way of understanding how to invest in cryptocurrencies or Tokens. Professor Torras is the author of two books: Cryptocurrencies: Bitcoin and Blockchain and The New Digital Revolution.
In this interview, he shares his ideas about the evolution of FinTech and how he integrates his extensive experience into his classes at EADA.
Blockchain goes beyond cryptocurrencies, and there are a lot of companies using it nowadays, from Walmart to Disney and Maersk.
Can you tell us in a few words what makes Blockchain technology so revolutionary?
Blockchain is a way of organising data, creating a database distributed with a P2P network, totally decentralised, that links data in a certain order. Blockchain goes beyond cryptocurrencies, and there are a lot of companies using it nowadays, from Walmart to Disney and Maersk.
What is the most rewarding aspect of working with cryptocurrencies?
It is rewarding to see that you are working in a sector that is new, and that is flourishing, but it is true that we are starting to face major issues such as fraud, the objection of financial institutions, huge electrical power consumption, and we can foresee the threat of Quantum Computing, the technology that will compromise blockchain.
Why do traditional banking institutions often characterise cryptocurrencies as a threat?
This fears will only be valid if we can use cryptocurrencies on a normal day-to-day basis – now you cannot go to your grocery store and pay using crypto. When crypto can survive alongside traditional currencies, traditional banks will not be the only ones threatened, but central banks as well. There will be a new economy outside of the control of central banks and government. Nowadays, banking is the middleman in every financial transaction – with crypto, there is no middleman, and therefore once cryptocurrencies take off, banks may not needed anymore.
Huge volatility is equal to huge risks, as well huge profits or loses. The crypto investor invests a small amount of money assuming that he can lose it and expecting huge profits.
How do you think that cryptocurrencies will evolve over the next few years?
I think crypto will never compete against traditional currencies — governments and Central Banks will never accept them. Right now, it looks more like a Ponzi Scheme than an alternative currency that can be used on a regular basis. Why? Because crypto is an extremely popular asset that is not backed – there is no intrinsic value, with huge volumes of negotiation and no regulation. The market will probably grow over the next few years, but the real issue predicting when the growth will stop, and nobody knows the answer to this question.
Can cryptocurrency survive in today’s volatile market?
Of course, that is one of the reasons why they are so popular. Huge volatility is equal to huge risks, as well huge profits or loses. The crypto investor invests a small amount of money assuming that he can lose it and expecting huge profits.
I wish that somebody had told me to create my own investment analysis and follow it when I was starting out – even when others questioned it.
How can we maintain ethical standards in cryptocurrency with limited regulation?
Crypto was born to create an alternative and more ethical financial system, but this initial aim is no longer realistic in the crypto world — crypto has switched to more speculative and capitalist purposes.
How has your extensive professional experience informed what you teach at EADA?
I try to explain my method, which variables I analyse when I want to invest in crypto, and which platforms are the most reliable. I love to teach what I have learned from my own mistakes, and after some years of experience, there is a lot that I can share.
I wish that somebody had told me to create my own investment analysis and follow it when I was starting out – even when others questioned it.
Do you have any advice for young professionals who want to get in to cryptocurrency?
Sometimes our sense of understanding and learning from past stories is largely illusory. The fact that many important events involved choices makes you exaggerate the role of skill and underestimate luck as a player in the +outcome. Just try to do a proper analysis and follow common sense, because at the end, nobody foresaw that in 2012 Bitcoin would be the main crypto on the market.