How Blockchain Works: Marketplace & Price

[Music]

hi my name is kinjal Shaw and I'm a

partner at watching Capital my name is

olianka odannarin I am the founder of

black women blockchain Council and I'm

also a blockchain Enthusiast we were

founded back in 2013 so one of the

earliest to focus specifically on

blockchain use cases and we invest

across the entire industry the mission

of black women blockchain council is to

make sure that no one gets left behind

in particular the black women we want to

make sure that this technology is a

field that they see themselves at I

think of blockchain as a horizontal

technology that can be applied to many

different sectors what really drew me

into blockchain is how interdisciplinary

it is it pulls on threads from economics

politics social sciences and even beyond

that to philosophy I myself am an

investor at blockchain Capital I spend

most of my time better understanding the

technology researching and doing

diligence on a number of opportunities

and then working with Founders to help

build this industry together

[Music]

every week you read that bitcoin's price

is going up or down

some newfangled cryptocurrency

skyrockets in value and a piece of

digital art famously sells for 69

million dollars

but a few months later you read that

everything is crashing and people are

losing money

and then it all goes back up again

what's going on what does it even mean

for things to have value on the

blockchain

blockchain as a technology allows us to

make new forms of cryptocurrencies and

new forms of ownership

it does this by enabling decentralized

record keeping

but the technology itself doesn't assign

prices or values people do that prices

on a blockchain are determined by how

much people are willing to pay using

traditional forms of money how does this

work

well transactions are saved on a

blockchain when somebody gives their

currency to somebody else but what do

they get in return well it could be

anything really like buying a pizza

using Bitcoin

these days the most common transaction

is to trade digital assets for each

other or for traditional money on an

exchange

an exchange is a marketplace where

anybody can buy or sell something

the price at any given moment is not set

by a central Authority but by what

people are willing to pay

but if lots of people want to buy these

same assets we may see the price go up

as an example consider the London Stock

Exchange

when this Marketplace emerge in a coffee

house in the early 1700s people traded

Stocks by shouting the price

making a deal and then handing over cash

cryptocurrencies and other tokens are

bought and sold in the same way on

Modern exchanges

in both cases and in any free market

there's no higher power deciding prices

just a free-for-all based on the

economic principle of supply and demand

but why do the prices swing so much more

for digital assets

that depends on the asset and why people

value it digital assets on a blockchain

could have physical real world value

today people are experimenting with

selling concert tickets on the

blockchain

one day blockchain could be used to

record government recognized ownership

of a home with real walls and real roof

the price of a home is determined by

supply and demand in the real world

independent of how its ownership is

recorded

the blockchain is just a digital setting

in stone to record that ownership and

doesn't impact the price other digital

assets only have psychological value you

value it because you believe somebody

else will also value it like digital art

where price is based on how much the

buyer believes they'll get for reselling

a given piece even traditional

currencies don't have real world value

unless others believe in them

consider the US dollar

the paper itself has no value

dollars are only valuable if you believe

you can use them for payment and that

the person you pay believes the same

thing

with the traditional currency disbelief

depends on a country's military or

economic power if everybody believes a

currency has value

if they stop believing a currency stops

having value this is why some

traditional currencies can drop in value

causing inflation

many factors can lead to why people

believe there is value in cryptocurrency

things like media hype government

regulations and businesses accepting

digital currency can all cause people to

believe or disbelieve the price of

Bitcoin or any other cryptocurrency on a

blockchain ultimately measures how much

people believe

blockchain technology is touted by many

for its potential and yet many

blockchain projects have failed because

of hacks and scams beliefs can fluctuate

wildly which is why prices go up and

down so much and so quickly if a lot

more people believe digital assets could

One Day become much more valuable if a

lot fewer people believe these assets

could become completely worthless and

with so many different types of projects

using blockchain technology it's hard to

tell which will succeed and which are

doomed to fail

foreign

[Music]