Blockchain and the History of Money: with HEC Prof. Olivier Bossard





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Premiered May 7, 2019

**English and French subtitles available**
Olivier Bossard Executive Director of MSc in Finance at HEC Paris offers a historical perspective on the Blockchain revolution.
What elements link today’s cryptocurrencies with the paleo-currencies?
What makes Blockchain different from everything that preceded?
Which elements are revolutionary and which are just an evolution?

Professor of Finance and Executive Director of the MSc Finance at HEC Paris, graduated as an Engineer from Ecole Centrale Paris (Diplôme d’ingénieur de l’ECP / MSc in Applied Mathematics, 1991), and subsequently studied in Japan where he earned a second MSc in Applied Maths from Yokohama National University, in 1993.
He has been working in the Financial Markets industry for over two decades in Paris, London and Frankfurt.
In his latest role as Head of Structured Products and Exotics, Trading and Structuring, he was managing 60 resources across the platform, in Europe and Asia.
In 2010, Olivier joined Macquarie Bank to run Global Derivatives Trading ex-Asia, with teams in London, Frankfurt, Cape Town and New York.
Promoted to Senior Managing Director in 2011, he served as Co-Head of the Equity Derivatives Division EMEA.
Passionate about teaching, Olivier Bossard has been lecturing at HEC continuously since 1999, in parallel to his banking career. Since 2012, he now dedicates most of his time on consulting mandates and giving back to the younger generation through his involvement at HEC’s MSc in Finance.

To understand the blockchain revolution, I like to go back in time and try to understand the different stages of the history of Money.
So, first of all, if I had to define Money, I would say that it has three functions: it is an intermediary of exchange, it is a unit of account, but also a store of value.
At the origins of the history of humanity, the exchange of goods was done on the basis of barter with units of account: a goat against 5 chickens or against 50 bananas. However, none of these goods could serve as a store of value: simply because the chicken and goat die, and the banana rots. Then, palaeo-currencies appeared, for example, pearly shells, and therefore rare in the mountainous regions, to serve not only as an intermediary of exchange and unit of account but also as a store of value.
The value of money became guaranteed by the rarity of its support (gold or electrum coins in antiquity) and also by the fact that it was stamped or minted by a guarantor, such as the Roman Empire or the Chinese Qin Empire, then the medieval lords and the city-states of Italy.
And then, over the centuries, we went from those currencies that had intrinsic value (convertible into gold) to so-called fiduciary currencies, that is to say without intrinsic value, but based on our confidence in a state and its central bank. That is the case of our current monetary units (the euro, the dollar) which have lost their convertibility to gold but are solely guaranteed by the confidence in our states.
In addition, the physical money (palpable physical coins and notes) is gradually disappearing, being replaced by scriptural money, i.e. literally written on registers without being systematically associated with its physical support.
Finally, we arrive at the third stage of this evolution: money has undergone a last evolution step with digitization: exchanges are now in electronic form, with bank cards and online payments, where a controlling body still exists but does not intervene directly.
And finally, we get there, the Blockchain is opening up a new revolutionary chapter in this "History of Money", precisely with the emergence of Crypto-Currencies: not only has the money become digital but it becomes also dissociated from any central controlling authority.
And this is a form of digital money totally different from anything we've seen before! Yet, the blockchain technology preserves the essence of money: an abstract token that is inherently immutable, infallible, eternal, retains its value and represents the exchange of value, cannot be seized or frozen, can be transmitted anywhere in the world, can be independently verified by anyone who receives it.
But it is not controlled by anyone.

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