The use of digital cryptocurrencies and blockchain technology, the latter of which records, verifies, and secures cryptocurrency transactions, has surged in recent years given its potential to supplant traditional financial systems.
However, the technology is still in its infancy and subject to scams, hacking, theft, and other problems.
“There are over 1,600 blockchains out there now. It’s similar to how the dotcom bubble was before it burst. My feeling is that we need that bubble to burst to eliminate the wheat from the chaff,” said Jacob Vugrinac, a cryptocurrency investment advisor.
Mr. Vugrinac, 31, a Toledo native who is CEO and founder of PolyBlock Investments LLC, of Denver, will be part of a panel of experts discussing cryptocurrency Tuesday from 5:30 to 8 p.m. at EPIC Toledo Connect Tech, an event sponsored by the Toledo Chamber of Commerce that will be held at The Andersons headquarters in Monclova Township.
Cryptocurrencies are digital currencies designed to work as a medium of exchange for transactions, just like a normal currency. But since they are digital and need to remain secure, the transactions are highly encrypted — hence the name cryptocurrency.
The most widely-known cryptocurrency is Bitcoin, which uses a blockchain to secure its transactions.
“A blockchain is the ability to have a digital ledger that’s both immutable and indelible and publicly sourced,” Mr. Vugrinac said.
With a blockchain, transactions are recorded across a network of computers, and the transactions can only be changed or altered by agreement of all the network’s members who usually have a healthy mutual distrust of each other.
“The beauty of a cryptocurrency …is it’s not controlled by a third party, like a bank or a government,” Mr. Vugrinac said.
An accountant, Mr. Vugrinac has been working and investing in cryptocurrency for the last three years but at the end of 2017 he decided to start PolyBlock to advise investors on the emerging technology.
“I made the move to do it full-time because the fear of missing out was greater than the fear of failure,” said Mr. Vugrinac, who believes cryptocurrencies will be more established and in use in the next five years.
“The vast majority of (blockchains) are networks trying to solve an issue, such as medical records,” he said.
Most medical records are stored and kept secret by companies that operate individual databases that don’t interact with other such databases.
“There are (cryptocurrencies) out there attempting to put all your medical records on a blockchain and it would be encrypted so that only yourself or a physician would see it. You would have to use their (digital) coin to pay to see records on that network,” Mr. Vugrinac said.
Some investors have lost money and some blockchains in other countries have been hacked or shut down by governments. But the concept is gaining steam.
Fidelity Investments has opened a desk for cryptocurrency investments, and well known investment banks like Morgan Stanley and private equity funds like the Blackstone Group are beginning to dabble in blockchains and cryptocurrencies.
“It’s all still extremely early. When there will be mass adoption of it all, I can’t say,” Mr. Vugrinac said.
Contact Jon Chavez at jchavez@theblade.com or 419-724-6128.
First Published July 30, 2018, 10:10 p.m.
