Welcome to our latest interview series where we delve into the world of cryptocurrencies and distributed ledger technologies. Today, we have the pleasure of speaking with Dr. Walter Kurz, a renowned expert in the field. Dr. Kurz shares his experiences, knowledge, and predictions about the future of blockchain and digital currencies.
1. Can you tell us a little about your background and how you became involved in the cryptocurrency and DLT space?
Dr. Walter Kurz: When it comes to digital assets, cryptocurrency, and DLT, I must confess I’m a latecomer. For years, I ignored Bitcoin and the like. My mother, on the other hand, has been heavily invested in the scene since 2012 and is known as CryptoOma. For years she kept saying, „Walter, you need to get into Bitcoin…“ and my response was always, „I don’t understand this stuff, a few computers pushing numbers around, how can that have any sustainable value?“ However, after she and her partner lost a large portion of their life savings in highly specialized and extremely professionally executed scam projects, and in return, got to watch videos of community leaders driving very expensive cars in very warm countries, now owning entire housing complexes and wearing expensive watches, I was forced to start looking into the crypto and DLT world.
At first, I didn’t understand anything. OpenSea told me to connect my wallet and recommended MetaMask… Wallet??? MetaMask??? I fired up a search engine and tried to figure out what that could mean. Several sessions and numerous videos later, I had a first overview and slowly began to understand the systematics. I had a real aha moment when I connected my wallet to OpenSea for the first time. I was completely bewildered that I suddenly had an account there without creating one. No disclosure of my email address, no annoying confirmation email, no security code, no extremely tedious verification that I am a human and having to click on multiple hydrants and reveal my phone number with a confirmation email (the usual unethical data-harvesting measures of big high-tech companies). Just connect wallet and go… I was extremely fascinated and as a business expert, I naturally immediately began to translate the possibilities of Web3 into the business world. Today, I set up forks of blockchains myself, write smart contracts with Copilot, deploy tokens, and am, among other things, specialized in the tokenization of real-world assets.
2. In your opinion, what has been the most significant development in the crypto and DLT space in the past year?
Dr. Walter Kurz: In my opinion, the significant development here is that digital assets and DLT technologies are finally being recognized and taken seriously by public institutions. Originally, this was more of a community of nerds, geeks, and insiders, and the general public had no idea what it was all about. Bitcoin, as the flagship project in the media, has ensured over the years that the field of digital assets has gained more and more traction, and increasingly, wealth is being managed via DLT. However, even today, outsiders often do not fully understand the total wealth that has emerged here, in the sense of what could almost be called a separate digital online economy, which is only partially geographically assignable. Even the major CEX scandals have indirectly and unintentionally increased public attention through their media impact. A real breakthrough was achieved with the SEC’s approval of Bitcoin ETFs, prominently led by BlackRock. This was a decisive signal to institutional investors that Bitcoin and other digital assets have outgrown their infancy and can be taken seriously as investment instruments. In the meantime, ETH ETFs have also been approved, and other digital assets will follow. The effect is that digital and real-world assets are coming closer together and can coexist. Additionally, there are numerous efforts by official bodies and organizations, such as the otherwise ultra-conservative regulation-crazy EU, to use DLT not only in the regulated FinTech sector but also for eID and digital citizen signatures in the future. Not all of these developments are always in the spirit of the essentially freedom-loving digital assets enthusiasts, who prefer anonymity, decentralization, and freedom of action.
3. How do you see the adoption of blockchain technology evolving over the next five years? Which industries do you believe will be the most impacted?
Dr. Walter Kurz: Over the next five years, we’re going to see a significant evolution in the adoption of blockchain technology, with certain trends and sectors standing out: Firstly, more and more DAOs will emerge, but they won’t have an easy ride. Regulatory bodies will scrutinize them heavily, and they’ll also have to fend off internal scammers. The decentralized nature of DAOs is both their strength and their Achilles‘ heel. Expect a lot of trial and error here.
Then there are Social Technologies (SocialTec), which will use blockchain to transform how we interact on social platforms. Imagine a world where your social media interactions are secure, verified, and you get paid for your content without a middleman taking a cut. That’s the promise of SocialTec.
Technologies like Ripple, especially in cross-border payments, will also see massive growth. Ripple’s smart contracts are particularly interesting because they deviate from the usual EVM (Ethereum Virtual Machine) logic. This divergence could lead to innovative financial products and services that we haven’t even thought of yet.
Blockchain’s most immediate and transformative impact will continue to be in the financial sector. Central Bank Digital Currencies (CBDCs) are gaining momentum globally, with nineteen G20 nations now piloting CBDC projects. These digital currencies promise to enhance the efficiency of payment systems, improve monetary policy implementation, and reduce transaction costs. The significance of this cannot be overstated; it’s like giving central banks a new set of high-tech tools to manage the economy more effectively.
Governments are also exploring blockchain for a range of public services, from digital identities and voting systems to public record keeping. Imagine a world where you don’t have to stand in line at the DMV because all your data is securely stored on a blockchain.
Blockchain is also making inroads into the entertainment and media industries. It can be used to manage intellectual property rights, ensuring that creators are fairly compensated. No more middlemen taking a huge cut of artists‘ earnings; blockchain can ensure that payments are made directly and transparently.
4. There has been a lot of talk about the regulatory environment surrounding cryptocurrencies. What are your thoughts on how regulation will shape the future of crypto?
Dr. Walter Kurz: It’s going to get worse, and there’s a real risk that overregulation could kill the foundational idea of DLT-based economies. On the flip side, many fraudulent individuals are exploiting these regulatory gaps. For instance, since ICOs (Initial Coin Offerings) or TGEs (Token Generation Events) are heavily regulated and even banned in some countries, entities are now offering unregulated NFTs as entry points, which can later be converted into fungible tokens or similar assets. There are entire networks with malicious intentions, often working with highly specialized legal advisors, setting up extremely complex systems to siphon off assets from retail investors and make them disappear through swaps and conversions. In these processes, owners often have to waive all former rights. An insider from these illegal networks once explained it simply: these projects are designed to seize illegal fiat assets (black money) and make them vanish, banking on the idea that the owners won’t sue because it was illegal money in the first place. This example highlights a critical aspect of DLT: retail investors need more protection and regulation. But again, this goes against the freedom-centric ethos of DLT. Over time, regulation will likely become the norm and will be applied to all kinds of digital assets. Future generations will probably find these regulations frustrating and will come up with new systems to circumvent conservative cryptocurrency regulations. It’s a kind of evolution.
5. Security is a major concern for many when it comes to digital currencies. What are the most effective strategies currently being used to secure blockchain networks?
Dr. Walter Kurz: Don’t trust anyone. Diversify your investments across wallets, platforms, and projects. If one fails, at least the rest of your diversified portfolio is still there. If possible, verify smart contracts. There are specialized platforms that can perform basic checks for you, like technology audits, checking if the ownership of the smart contract is revoked in DAO projects, and the distribution of digital assets among wallets. Use cold or hardware wallets. Multi-signature wallets are also a good option. Be wary of phishing scams—double-check URLs, avoid suspicious links, and verify the authenticity of communications. Browser extensions like MetaMask can help detect phishing attempts. Stick to reputable wallets and be cautious of fake ones. Don’t download unverified software to avoid Trojan malware. If you must access your wallet over public Wi-Fi, use a VPN. Educate yourself on common scams.
6. Can you discuss any current or upcoming projects you are working on that you are particularly excited about?
Dr. Walter Kurz: We’re kicking off a new hybrid DAO project aimed at tokenizing real estate and establishing investor pools. The funds will be managed by a specialist team to handle profitable real estate projects worldwide. Each project is secured with precious metal deposits. If it works out, one of our highlight projects will be that we buy a private island together. We’ll develop it in reality and overlay it with a superfancy metaverse. Currently, we’re putting together the founding team and working on regulatory and organizational matters. Interested new community members are welcome to get involved. Check it out at https://lisadao.com/full.html
Besides the DAO project, I am personally working on a concept for a fully digitized public company limited by shares (Aktiengesellschaft), where all assets and organizational steps are handled via tokens and wallets. This includes Security Token Offerings (STOs) with built-in KYC and even conceptual access for regulatory authorities to audit and approve all relevant activities of a public company. For example, regulatory bodies like the FMA, BaFin, or SEC could sign off on an ICO with their authority wallet, allowing every user (shareholder) to verify if a token is approved and understand the implications for different jurisdictions. This system would enable a new form of decentralized but still regulated digital exchanges, seamlessly covering public companies from a DAO, through a privately owned limited company, all the way to a fully-fledged two-layered public company with a supervisory board and executive board, or in the form of a European Societas Europaea (SE).
7. What are the biggest misconceptions about cryptocurrencies and DLT that you encounter? How do you address them?
Dr. Walter Kurz: One of the biggest misconceptions I encounter is that cryptocurrencies are just a tool for criminals. While this is at least semi-true, there are also many honest people online. Another common misconception is that cryptocurrencies have no intrinsic value. The same applies to fiat money, so it’s not really news. Many people think blockchain is only about cryptocurrencies. In reality, blockchain was born in the early 1990s as a timestamp and verification service, with Bitcoin and FinTech coming 17 years later. Another misconception is that blockchain technology is infallible. This is wrong, especially when the blockchain is not really or correctly decentralized. Technically, it is possible to operate a blockchain on one server, which is far from being secure and decentralized. How I address them? I try to explain the topic a bit but have learned to give up when the other person is not able or willing to understand the issue.
8. With the rise of decentralized finance (DeFi), how do you see this sector evolving, and what impact will it have on traditional financial systems?
Dr. Walter Kurz: The major failures of centralized exchanges (CEX) have ironically made them more attractive due to the robust features they offer, which many decentralized exchanges (DEX) lack. While Automated Market Makers (AMM) and Constant Function Market Makers (CFMM) are useful, we also need order books to implement complex trading strategies and self-regulating market logic. The most crucial aspect is ensuring that no central entities control the exchange.
Also, regulatory authorities should streamline the approval processes, making them more time and resource-efficient, manageable, and affordable. Regular crowdfunding projects should also be made easier. As mentioned earlier, FinTech and blockchain technologies offer tremendous potential for innovation and efficiency, and regulatory frameworks need to evolve to support these advancements. Simplifying these processes would not only foster innovation but also ensure better compliance and security in the evolving digital asset landscape. Movement and developments like this will lead to a merge of both systems over time. Maybe in 30-40 years, only old people will remember that there were two systems before. When I was young… we had to use printed cotton to pay for milk…
9. Could you share your thoughts on the environmental impact of blockchain technology? What solutions are being explored to address these concerns?
Dr. Walter Kurz: The often-criticized Proof-of-Work algorithm, e.g., used for Bitcoins, doesn’t inherently consume a lot of energy. It’s more about the fact that the fastest one wins. This turns it into a high-tech Formula One race starting every few seconds, where the most powerful validator wins. This is the real reason why Bitcoin uses up so many resources. The harmful impact of Bitcoin on the environment is based on an ecological misconception rooted in flawed game theory considerations, not in the technical aspect of the applied algorithm. If you take out the reward for the fastest validator from the ecosystem logic, the PoW algorithm becomes harmless, not overly energy-consuming, and remains very simple and safe. And yes, there are many other consensus algorithms that consume far less energy (e.g., Ethereum changed from PoW to PoS and now consumes 99.5% less energy). But digitalization is part of our life (unless some of the politically crazy press the red button that makes caves attractive again). Please compare the energy consumption of DLT/blockchain with the consumption of social media as a whole (DLT is a kindergartener compared to these systems). Additionally, regular fiat money/traditional financial systems are also mainly digital, with money being transferred and governed through a global computer/financial network. Instead of focusing solely on the energy consumption of these systems, we should look into ways to produce energy in more acceptable, sustainable ways and make the systems using energy more efficient. Unfortunately, we live in times where politicians believe nuclear energy is green, while burning wood is seen as an environmental crime.
10. For those new to cryptocurrency and blockchain, what resources or advice would you recommend to help them get started?
Dr. Walter Kurz: ChatGPT, Video Blogs and BTC-Geek-God Marc 🙂
11. What role do you think emerging technologies like AI and IoT will play in the future of blockchain and cryptocurrencies?
Dr. Walter Kurz: AI is clearly a digital disruption and is just starting with its first baby steps in real-world applications. What I would love to have, since I’m completely incompetent as a trader, is a really smart AI that can reset a perpetual future grid according to price developments in both long and short positions, and maybe even adjust the leverage. I tried doing that manually (or with some rather rudimentary trading bots) and learned the true meaning of Bitcoin halving. It means that you can happily halve your wealth by trading high leverage Bitcoin futures within a few minutes 🙂 Besides that, AI should hunt down scammers and hackers, or it should help users understand basic concepts or special projects in all aspects by discussing and looking up aspects.
12. Lastly, what predictions do you have for the future of Bitcoin and other major cryptocurrencies? Where do you see the market heading?
Dr. Walter Kurz: Bitcoin and other leading cryptocurrencies will primarily become the playground of whales. Since the entry of institutional investors like BlackRock & Co., these whales control the market due to the vast amounts of assets they hold. They can apply huge price leverages and literally manipulate prices at will. Small investors (<100k) will be exploited until they are fed up and escape into other projects.
Personally, I would not invest in Bitcoin or other leading cryptos long-term, as their price development is already heavily synchronized. If you don’t believe me, try this: open the chart of Bitcoin on Binance (or any other exchange with precise charts), add Bollinger Bands, and switch to a 1-second view. Keep that window open, then open another one with Ethereum or Ripple and do the same. You’ll see that the big buy/sell, long/short signals are almost identical. There are slight differences because other people use the markets too, but the tendencies are the same. You can switch to 5-minute or 15-minute views and see similar patterns. This synchronicity makes the market unattractive.
Yes, you can gamble and hope that the price of BTC will rise to 100k, 150k, or 500k, but it’s a gamble and depends more on the strategy of whales than on small asset owners like us. If you are into prediction models, you can look at PlanB, known for his stock-to-flow model. PlanB has made significant predictions about Bitcoin’s price, leveraging data and patterns to forecast market trends. His model suggests that Bitcoin could reach substantial price points in the future, offering a compelling analysis of market dynamics.
13. Thank you very much Walter.
We hope you found this interview with Dr. Walter Kurz insightful. His expertise provides a valuable perspective on the current state and future of cryptocurrencies and distributed ledger technology. Stay tuned for more expert interviews and updates in the world of blockchain and crypto.
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