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Understanding bitcoin and the great crypto boom

by: Cassandra Tanti
17/02/2021

In our Q&A with Daniel Coheur, co-founder of Tokeny in Monaco, we explore what is behind the monumental rise of bitcoin and the paradigm shift from centralised to decentralised finance.

What a difference a year makes. Less than 12 months ago, bitcoin was sitting at $3,000 and everyone was looking forward to a normal year ahead.

Enter Covid-19 and the digital currency breaks into a bull run, spawning a new community of retail investors who have a lot of free time on their hands.

All of a sudden Michael Saylor, MicroStrategy chief executive officer, is calling bitcoin “digital gold” and “the scarcest asset in the world”; the planet’s richest man, Elon Musk, makes waves with Tesla’s announcement that it bought $1.5 billion of bitcoin; and traders analysts say institution investment is happening “at a staggering pace”.

Bitcoin hit its all-time high of $50K on Tuesday and the digital asset continues to make inroads into traditional finance, including news that an investment unit of Morgan Stanley is considering whether to bet on bitcoin.

So, what is this great crypto boom?

Well, there is a saying in the digital community that “You don’t get crypto, until you do”. To help explain the phenomenon, Monaco Life spoke to Daniel Coheur, co-founder and Chief Commercial Officer of Tokeny, a digital solutions company that the Monaco government has entrusted with securing its blockchain finance platform.

Monaco Life: How would you describe what has happened over the past six to 12 months with regards to bitcoin?

Daniel Coheur: When you have something like bitcoin that is not is backed by government, then trust becomes essential.

There may have been a very active community of people who believed in the technology and its potential as a future store of value by excellence next to gold, but there was no signal from the main actor of this ecosystem that it was the case.

The regulator helped significantly by allowing hedge funds to start investing, but that went largely unnoticed.

Then came people who were “visible”. The first to really take a stand was Michael Saylor, founder of MicroStrategy, who said that his company was going to buy bitcoin. Today, they have more than $3 billion US in bitcoin, so that certainly pushed things ahead.

Then Laurence Fink from BlackRock said that bitcoin could become an equivalent store of value as gold. Blackrock has $8 billion under management, so if those guys say that, it really means something. Not only BlackRock, but hedge funds in general were saying: “Ok, now we should invest.” Then, Elon Musk brought $1.5 billion bitcoin with Tesla.

It is what people needed to see – that the world’s biggest institutions were getting involved.
Meanwhile, according to the Bank of America, Americans are sitting on $1.6 trillion of spare cash, having not been able to spend money due to Covid-19 and the lockdowns. In the UK, household savings of typically $5 billion are now over $20 billion. With time on their hands and cash to play with, more people have been investing in cryptos.

So, the number of transactions began increasing, as well as the number of accounts. The number of individual Ethereum wallets has grown from 34 million at the beginning of 2020 to over 51 million at the end of 2020.

Last but not least, Decentralised Finance (DeFi) really pushed this forward by providing a means to show how the technology could be used and how, based on those crypto assets, you could make even more money than on the speculative side of investing.

So, I think all of this has been pushing the market to realise that this is not something that will disappear, and everyone that was passive is now looking to invest. That is what has been driving the price of bitcoin.

Where do you see bitcoin going this year?

If it is indeed becoming a store of value that is comparable to gold (people have been claiming that it will reach $200,000 by the end of 2021), is that the limit?

There is a reality that the market can’t ignore: unlike the euro or dollar, you cannot mine bitcoin forever. There is a limited amount of bitcoin and that is a certainty – there is nothing you can do about it.

Canada has approved the first North American Bitcoin exchange-traded fund, Deutsche Bank is planning to offer crypto custody to hedge funds that invest in the asset class, BNY Mellon will roll out its own digital custody unit, and Morgan Stanley Investment Management is exploring whether bitcoin would be a suitable option for its investors. Is there still a place for retail traders in bitcoin and do you see it becoming mainstream?

What is important to remember is that all of these companies are involved in blockchain projects. Besides the value that they place on the currency itself, they have developed a good understanding of the technology. Until recently, institutional investors had no industry grade digital custody solutions. Now, your banker can buy bitcoins or digital securities and have solutions delivered by companies like BitGo, Metaco or Pyctor to safely custody them. The technology risk has been overcome and its simplicity is being made available to investors.

There is a lot of proof of concept that is being run not only to use bitcoins but to understand how, with this technology, banks can upgrade their current infrastructure. The perception of technology is not a barrier of entry for them anymore.

Michael Saylor famously said it first, and Jim Cramer, host of Mad Money on CNBC, repeated it recently, that it would be “irresponsible” for hedge fund managers and companies not to own bitcoin. Do you agree with that statement?

Every financial product has an associated risk, which is driven by the profile of investors – you sign-up, you identity your risk profile, and then you invest according to that.
What would be irresponsible is if you have customers that are willing to take that risk and you are not able to offer them the option.

What is the difference between bitcoin and other cryptocurrencies?
Bitcoin signaled the emergence of a radically new form of digital money that operates outside the control of any government or corporation. With time, people began to realise that one of the underlying innovations of bitcoin, the blockchain, could be utilised for other purposes. Ethereum proposed to utilise blockchain technology not only for maintaining a decentralised payment network but to power decentralised finance. Ethereum applications and contracts are powered by ether, the Ethereum network’s currency, which is now the second largest cryptocurrency by market capitalisation.

It is a different perspective with regards to investing in ether versus bitcoin, because they each serve a very different purpose. For a currency that is considered a store of value, it depends on how much trust people put into those currencies, while for other altcoins that are pouring into infrastructure, it depends on how much potential you see in that infrastructure and what the limitations are behind it.

It takes around 10 minutes of computer time to “mine” one bitcoin. That’s equivalent to 72,000GW of electricity. Energy usage is therefore one of cryptocurrencies’ biggest negatives. How do you see this problem being solved in the future?

It is not something that will change with bitcoin because that is simply the way it operates.
However, Ethereum – which is the dominant public blockchain to power financial transactions – is moving from proof of work to proof of stake, and this will address the issue. Ethereum is not the only one doing this, there are other blockchains gaining in popularity that are using the same kind of consensus mechanism. Polkadot is one that is progressing critically fast. Speed and energy consumption are driving the adoption of the technology as an infrastructure, and when you know that there are 300,000 developers working Ethereum, you understand that this is just a matter of time.

Do you see blockchain changing the future of finance?

What makes blockchain unique is trust, so it will definitely change market infrastructures. Without trust, you need third parties to manage your counterparty risk, a custodian to preserve the integrity of your assets, etc. Very soon, we will no longer see blockchain only as a store of value for bitcoin. Blockchain will be behind every transfer of value. Right now, that is money, but it will soon be anything carrying value – like art, property, or a car, starting of course with securities.
Blockchain and smart contracts will be mainstream in the future and everybody will use it without even noticing. It will be like email is today – no one cares what protocol is behind it, they are only confronted with it when their laptop crashes and they have to reinstall their email.

Where does Monaco sit in this digital paradigm shift?
There has been a lot of work from the National Council and the Government to provide the regulatory framework for Monaco to position itself within this technology. There is the law that was published last year on STOs, and now there is a proposal from the National Council to allow the digital registration on a shared ledger of unlisted company securities. Tokeny has the technology to power that kind of solution; once the share registry is digitised then you can introduce many other services such as online voting. It will also facilitate the transfer of shares and make the process more transparent and more in line with international regulations.

But this is one element of a much bigger picture that Frédéric Genta is overseeing through Extended Monaco and the digitalisation of the economy.
Everything that can be digitalised, will be digitalised, because Monaco wants to be running at the front of the pack.

Related stories:
Monaco advances its digital finance strategy
Daniel Coheur: “Our ambition is to protect Monaco’s reputation”
Prince: Digital is the turning point in Monaco’s history

Photo source: Pixabay

The story behind ‘Grace Forever’ at the CHPG

by: Cassandra Tanti
16/02/2021

Local artist Marcos Marin talks to Monaco Life about his latest instalment of Princess Grace in the maternity ward of the CHPG and what it was like to watch Prince Albert unveil the portrait.
It was a special day for everyone on 9th February when ‘Grace Forever’ was officially unveiled at the Princess Grace Hospital Centre, particularly for its creator Marcos Marin, Benoîte de Sevelinges who requested the work, and Prince Albert, her son.
Just as she cared for the citizens of Monaco for 26 years, Princess Grace now looks upon those who come to bring new life to the Principality or pray in the hospital chapel.
But it is not the first portrait of Princess Grace that Brazilian artist Marcos Marin has lovingly created and, as he revealed to Monaco Life, it certainly will not be the last.
Monaco Life: Where did the inspiration for this portrait of Princess Grace come from? 
Marcos Marin: Finding inspiration to make a portrait of Princess Grace is relatively easy in the face of so much beauty, serenity and history of an icon. I was motivated to create it after the director of the Princess Grace Hospital Centre (GHPC), Benoîte de Sevelinges, said that she wanted to have a new, large portrait of the princess. I am also in the middle of a project called ‘Grace Forever’, which is a series of portraits, sculptures and Grace paintings. So, finding a prestigious location among a magnificent art collection, that of the CHPG, was a union of desire, opportunity and fulfilment.
Can you tell us about the artistic process?
This portrait of Grace is a 230x200cm acrylic painting on canvas, which occupies a floor to ceiling space at the entrance of the maternity ward, embracing anyone who enters into a spiral of lines from the pupil of Grace’s eyes.
A study of the dimension of the hall and the movement of the spectator in the passage gave rise to the concept of the work. I chose a picture of Grace when she was a princess – serene, kind and engaging.
After deconstructing the picture into almost abstract lines, I did the physical hand execution of the work in my studio in Torri, Italy. The work was then assembled on stretcher wood and framed in Ventimiglia. There was already a robust wooden structure at a perfect angle at the hospital, and we used it to support the work, which finally became a mural.
Can you tell us more about your ‘Grace Forever’ project?
In 2019, it would have been Grace’s 90th birthday, and it was Prince Albert’s wish to celebrate in memory of his mother. Luciana de Montigny, a friend of the Prince, encouraged the organisation of a series of events, and a large gala was celebrated at the Hôtel de Paris in Monte-Carlo on 2nd November 2019. I was invited to present a sculpture also entitled ‘Grace Forever’ that would be co-signed by Prince Albert. The work was auctioned for charity.
Another similar sculpture, but three-metres long, was presented in Paris at the Mostra GV Monumental. Other editions of ‘Grace Forever’ sculptures were also presented at the New York Princess Grace Foundation Gala in 2019.
With the pandemic, other ‘Grace Forever’ projects were interrupted, until finally in December we installed Grace’s large portrait at the Monaco hospital. It was officially inaugurated on 9th February when Prince Albert also co-signed the work.
Another similar painting, part of the ‘Grace Forever’ project, will be presented in Singapore at the Prince Albert II of Monaco Foundation Gala in November 2021.
This huge and audacious project was carried out thanks to the great patron and art collector Riccardo de Caria, donor of the work to the hospital.

Prince Albert co-signed the ‘Grace Forever’ portrait by Marcos Marin

What was that moment like when Prince Albert officially unveiled the portrait of his mother in front of other key Monegasque personalities?
Despite the strict protocol surrounding Covid-19 and also out of respect, the atmosphere was smooth and serene, with a certain emotion that Grace’s face exudes. The strength of art spoke for itself.
For us, Grace is the princess, the Hollywood actress. But for Prince Albert, it is a portrait of his mother; he had another emotional perspective.
Also in attendance at the unveiling were Minister of Health and Social Affairs Didier Gamerdinger, Chairman of the Board of Directors at CHPG André Garino, Director of the Hospital Benoîte de Sevelinges, artist and President of the Brazil Monaco Project association Luciana de Montigny, and a representative of the patron, Riccardo de Caria.
How do you feel about the portrait’s positioning in the maternity ward of the CHPG?
I am very happy that once again my work of art is a vehicle with which people can honour the memory of Princess Grace and her legacy to the Principality of Monaco, a country that has welcomed myself and my art. I know how much Princess Grace is respected by her people and how her beautiful story still enchants the world.
My portrait is situated next to incredible works of art by great masters, such as the huge Vasarely installed nearby in this wing of the hospital. Art plays a very important role in Monaco and this is vividly present in its history. I hope my Grace can embrace the hearts of the people who go there at the entrance to both the maternity ward and the chapel of the hospital as well.
How many portraits of Grace Kelly have you painted so far?
I think I have already lost count, but at least 15 very important portraits have been made in these past 16 years of living in Monaco – works that found brilliant destinations, fulfilled charitable missions and are part of the history of Monaco.
A Princess Grace sculpture by Brazilian artist Marcos Marin

Can we expect more unveilings of your work soon?
I hope so. I am waiting for my schedule of events in Monaco, since we have reworked many plans due to the pandemic. At the beginning of March, I am due to inaugurate an imposing public monument in Ventimiglia at Cala del Forte, where an extension of the port of Monaco is located. And I am preparing some portraits of personalities for the Monte-Carlo Television Festival scheduled for June and the Cannes Film Festival in July.
 
Related stories:
Interview: Brazilian artist Marcos Marin
 
 

Princely couple lead virtual kick-off of rugby qualifier

by: Cassandra Tanti
09/02/2021

A handball between Prince Albert, Princess Charlene and French rugby player Mathieu Bastareaud has marked the official presentation of the Monaco Rugby Sevens Qualifier Tournament for the Tokyo Olympic Games.
The virtual kick-off took place at the Yacht Club of Monaco with the Princess’s brother Gareth Wittstock, who is general secretary of her Foundation, and Minister of State Pierre Dartout also in attendance.
The men and women’s Olympic Rugby Sevens Qualifying Tournament for the Tokyo Olympic Games will see 24 teams compete on 19th and 20th June 2021 at the Stade Louis II in the Principality of Monaco.

General Secretary of the Princess Charlene of Photo: Monaco Foundation Gareth Wittstock, Prince Albert, Princess Charlene and Minister of State Pierre Dartout at Tuesday’s presentation, by Eric Mathon / Prince’s Palace

The event is organised with the support of the Monegasque Rugby Federation, the Prince’s Government and institutional partners.
The top two women’s teams and the top men’s team to come out of Monaco will go on to compete in this year’s summer Olympic Games in Japan.
Rugby Sevens is expected to be one of the most highly anticipated events of the Tokyo Games, following the success of 2019 Rugby World Cup in Japan.
At the same time, on 19th June, the Sainte-Dévote children’s rugby tournament will be held, organised by the Monegasque Rugby Federation with the support of the Princess Charlene of Monaco Foundation. It will see  16 teams from around the world competing in an under-12 mini Sevens World Cup format run alongside the senior event.
The Monaco Sevens 2021 draw will take place in the Principality at the end of April.
 
Photos by Eric Mathon / Prince’s Palace
 
Related stories:

Monaco to host final qualification

 
 

How technology helped Monaco manage Covid

by: Cassandra Tanti
09/02/2021

By the time the Covid-19 epidemic reached Monaco in early 2020, the government had implemented or was trialling a number of technical projects as part of its Smart City programme. Suddenly, technology that was designed to improve lifestyle in the Principality took on a whole new significance: to help protect the population and save lives.
“Monaco is a science-based country. We collect the data, we analyse it, and we make a decision based on all the information we have,” Georges Gambarini, Smart City Programme Manager, tells Monaco Life.
The government has been steadily introducing a range of new technology on its path to becoming a Smart City. Noise monitors, traffic sensors, ‘smart’ traffic lights… they’re all delivering real time information for the government to adapt its city planning.
But Georges Gambarini never imagined that the technology he was charged with implementing would soon be used in Monaco’s strategy to tackle a worldwide pandemic.
“Pedestrian censors, for example, helped us monitor pedestrian flow in the city during the post-confinement period, especially at the train station exit,” reveals Mr Gambarini. “We had around 20,000 to 25,000 people a day passing through the train station, and each day we tried to understand that flow. Were we at 50% of our normal situation? Was there are a risk of contagion because we had a lot of people in a small corridor of the train station? It was very useful in helping us to understand what the real situation was in the city at a moment when anxiety was high.”

Photo: Monaco authorities use 3D simulation technology for impact analysis, by Monaco Life

One of the areas where Monaco has made significant ground is 3D technology. Every detail of the entire Principality has been digitally mapped. It is a critical advantage in urban planning, particularly in a development-heavy country like Monaco.
But again, technology that was introduced to measure, for example, how a new building would impact road traffic or wind propagation in the city, was utilised to help shape the government’s health measures.
“We were able to determine what the contagion risk was in a specific area of Monaco when someone was infected with Covid-19,” says Mr Gambarini. “In our 3D model of the Principality, we are able to inject a certain number of people who are contagious, apply the rules of contamination, and predict what the impact will be if there are 100 people without masks, then 200 people, etc.”
These 3D simulations allow authorities to recreate any digital scenario in Monaco and adjust their discussions and decision making according.
“It helps with questions like ‘Do we put in some new exits there?’, or ‘Will social distancing work in that space?’,” says the programme manager. “And it works because it is based on mathematics and the scientific rule of transmission.”
There are unknown factors, of course, but for the large part the people in Monaco have played by the rules.
“I’m not saying that digital saved everything in 2020, however thanks to digital people were able to work, to go shopping, etc. Decisions were made with the help of very deep data analysis, and technology sometimes helped to reinforce those decisions.”
If Monaco’s technical abilities advanced in 2020, they are set to excel in 2021 with the introduction of the sovereign cloud – data storage and computer power that not only resides in Monaco, but is also owned, governed and managed locally, with controls in place to ensure data is not accessible from outside the Principality.
“It will give us a very modern infrastructure with high calculation capabilities that we miss today,” explains Mr Gambarini. “We need to export our data to create algorithms, so the sovereign cloud will give us a very secure infrastructure and allow us to industrialise our deeptech strategy.”
From the beginning of 2021, the health situation in Monaco has accelerated significantly. What role technology is playing in limiting this impact will be a topic that Monaco Life will return to in the months ahead.
 
 

Monaco-based team poised to join F1 grid

by: Stephanie Horsman
09/02/2021

A new entry to the Formula One club, simply called the Monaco F1 Racing Team, is set to be the first new team to join the circuit in several years and the announcement is causing quite a stir in the racing world.

Formula One is about to see its first new team in ages, and aptly, due to its long racing history, the team is set to be Monaco-based. The new squad, called the Monaco F1 Racing Team, is looking to use new racing rules to secure entry into the exclusive club that has traditionally been dominated by big corporations and car manufacturers.

Monaco Increase Management (MIM), who joined forces with Spanish-based Campos Racing in 2019, were in negotiations with then-boss of F1 Chase Carey, but the reaction by Carey was lukewarm and nothing concrete came of the talks.

The team was hoping to debut in 2021 when new racing regulations would come into effect, but last year’s interrupted season due to the Covid pandemic put the kibosh on those plans.

“The current Monaco F1 Racing Team Project was the first to actively discuss the possibility of an entry with the F1 governance as early as 2019 and we were set to set up a structure accordingly, realising the potential of the new Technical Regulation that was initially supposed to come into force in 2021 and was subsequently delayed because of the pandemic,” said Salvatore Gandolfo, Founder and CEO of MIM, in a press statement.

The health situation delay was coupled with an accord put forth by F1 that said that any team wishing to join must pay a whopping $200 million (€165 million) “anti-dilution fee”, with the proceeds being evenly split between the current 10 teams on the Formula One roster. The fee is meant to protect the current prize money distribution system but is a big ask of anyone trying to break into the club.

Whilst this is officially on the books for 2021 to 2025, discussions with Formula One’s new chief, Stefano Domenicali, revealed a willingness to waive the massive fee.

“We believe that the recent statements of the new CEO, Stefano Domenicali, which suggest that the $200 million entry fee for new teams could be waived represent a step forward in the right direction,” said Gandolfo. “We appreciate the open attitude of both Stefano and the FIA and are ready to take the necessary steps in order to have our application finalised.”

The Automobile Club of Monaco has so far not raised objection to the name of the team, and if all goes ahead, the Monaco F1 Racing team will be the first to enter the fray since Haas in 2016.

 
Photo by Daniel Cristian on Unsplash
 
 

#8MarsMonaco to honour heroines of Covid

by: Cassandra Tanti
08/02/2021

The Principality will mark International Women’s Rights Day this year by honouring the females who have been working at the frontline of Monaco’s fight against Covid-19.
On Monday, exactly one month before its annual #8MarsMonaco campaign, the Women’s Rights Committee announced that International Women’s Rights Day 2021 will take on a special theme.
The campaign will highlight the heroines on the frontline since the lockdown of March 2020.
“A year after the first confinement, it seemed obvious to me to thank these women in the shadows who worked for the general interest,” said Céline Cottalorda, Interministerial Delegate for Women’s Rights.
Artist Anthony Alberti, alias Mr OneTeas, has again produced a series of photographic portraits which will be presented at the entrances to the Principality, on the Rock, and in the Fontvieille shopping mall.
Meanwhile, due to constraints surrounding the pandemic, the works at the Ministry of State will be inaugurated via a video broadcast on the committee’s social networks and on the government communication channel Monaco Info from 8th March, giving the public an opportunity to discover all of the works on display throughout the city.
 
Photo by Michael Alesi for the Government Communication Department