ARTHUR GOLDSTUCK: SA cryptocurrency guru is no bull when it comes to coins

09 December 2018 - 00:04 By Arthur Goldstuck

He's SA's single most influential person in the world of cryptocurrency, yet you've probably never heard of him. Riccardo Spagni is lead developer of a cryptocurrency or "coin" called Monero, with a market capitalisation of more than $2bn (R28bn) in mid-2018.
Its value fell by half in a recent crypto crash that included market leader bitcoin, but it's still worth more than six times what it was just two years ago.
Spagni, who lives in Plettenberg Bay, is also co-founder of Tari, a protocol for managing digital assets like loyalty points and virtual tokens, using the decentralised ledger technology called blockchain.
The tale of how he came to be the steward of Monero is the stuff of cloak-and-dagger drama. All cryptocurrencies depend on their communities of users and developers for their evolution. When the original founder attempted to merge what in 2014 was called BitMonero with a coin regarded as a scam, Spagni led a revolt of developers who "forked" it into a new version of the software.
The fork quickly took control away from the anonymous founder Spagni habitually calls a "crazy whackjob".
In his new Johannesburg offices in a Woodmead office park, Spagni is clearly on a quest for respectability. Monero - "coin" in Esperanto - is famed for its high levels of privacy, as buyers, sellers and trade amounts remain completely private and transactions can't be linked to specific computers. This also, however, has made it a favourite of criminals.
Unlike many of his peers, Spagni goes to great lengths to warn against speculation in cryptocurrency - particularly in Africa, which other coin evangelists argue can use the technology for financial inclusion.
"Part of me doesn't believe Africa in general is ready for cryptocurrency. There's a lack of technical expertise, a lack of infrastructure and bandwidth, and a lot of the smartphones are significantly older and might struggle to run the more modern software we're building for this. We're still a few years away from it being inclusionary.
"When it does get to that point and people have sufficient bandwidth and devices, then one of the big things it provides, which is very useful in the African context where people prefer cash, is privacy. But maybe in five years."
He also warns that massive regulatory changes are needed across the world.
"Practically, we're talking about a decade before it is a significant part of the global economy."
The current volatility of cryptocurrency is something he has seen many times since he began dabbling in bitcoin in 2011. And he warns we will see it many times in the future. Crypto, he says, overturns the conventional wisdom about when to get out of the stock market.
"The traditional way of thinking is that institutions are early adopters, venture capitalists get into companies early on, IPOs are accessible to everyone, clever people buy stock early, and it then trickles down. Eventually, when hairdressers are buying it's time to get out. Now it's the opposite: hairdressers got in before the smart money, and I'm wondering if the time to get out is when institutions come on board."
• Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter and Instagram on @art2gee..

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