At the end of February 2020 I took a business trip to Taipei to visit CoolBitX’s new corporate headquarters as Wuhan was battling what Donald Trump had deemed a local virus. Taiwan, an island 110 miles off the coast of China, had reported a dozen or so cases of the virus and had started to deploy a response strategy. My trip was cut short and I was advised to head home while I still could before quarantine measures were imposed. My temperature was taken three times in Taiwan — once sternly at the airport upon arrival, once by an apologetic check-in clerk at the hotel and once by a security guard at the door of a restaurant. Hand sanitizer was everywhere and there were rigorous mask distribution policies already in place at pharmacies, linked to your social security number (no pharmacy masks for visitors, sorry, though I was able to source a new one at the hotel every third day).
One month later, the virus has contaminated the globe, leaving in its wake more questions than answers. I have yet to have my temperature taken in any of the European countries I have visited since, despite the very real risk that I could be, as we all could be at this stage, a silent carrier. As most of us do, I have loved ones who fall in high risk categories and am forced to sit it out, helpless, scared, frustrated, unable to comfort in person those who need it most.
We all watched events unfold on our digital devices across the world in horror, as one government after the next ran out of options and did the unthinkable; literally turned off the planet.
Having left a 20-year career in traditional financial services last year to join the burgeoning blockchain industry, I have the privilege of straddling experience across several markets from traditional to virtual assets. It is impossible to predict the length and depth of the recession that this black swan event will trigger; productivity grinding sometimes to a halt, equity markets collapsing against an already negative backdrop in the credit, rates and energy markets. Cybersecurity threats are high, as criminals see opportunity to prey on increased screen time and gaps in preparedness. However amidst the chaos I believe there is value in relating and exploring the themes of pandemics, trust and their effect on the virtual asset industry at this crucial juncture.
Of Pandemics
Bill Gates has given pandemics a lot of thought. His 2015 Ted Talk, widely shared on social media channels, describes a haunting worst case scenario that rings all too familiar. But it wasn’t just Bill Gates, pandemics have been the topics of regular government simulations under both Obama and Trump administrations and specialized conferences and seminars every year, resulting in many experts today opining that, frankly, we should have seen it coming.
Nothing kills humans more than viruses and bacteria. HIV has killed 32 million and counting. The Spanish Flu, which you were far more likely to die of than COVID-19, wiped out more people in 1918 than World War I — double or triple more depending on the estimates, as high as 5% of the world’s population. The flu is still around, of course, killing half a million people each year.
Bryan Walsh, author of BBC Future’s “The History of Pandemics” and former TIME magazine international editor and environmental correspondent further explains that the number of new infectious diseases such as SARS, HIV and COVID-19 has increased nearly fourfold over the past century. Since 1980 alone, the number of outbreaks per year has more than tripled. He cites overpopulation (of both humans and livestock), interconnectedness of the planet, antibiotic resistance and anti-vaccination movements as all being contributing factors.
The cause of death from COVID-19 is largely understood to be due to the complications of pneumonia. Our global resources are being mobilized and deployed to face a shortage of beds and ventilators to assist patients in the latter stages of the disease.
But the debate of cause versus symptom of this virus is not resolved. A team of researchers at Sichuan University of Science and Engineering in China published research suggesting that based on their computational modelling, pneumonia could in fact be a secondary symptom of the viral progression. The research proposes that COVID-19 virus proteins “hijack” iron in red blood cells as a primary cause. @yishan on Twitter makes a compelling case in layman’s terms as to why this study should be more thoroughly tested, and quickly; he explores whether COVID-19 could be so fatal in later stages because patients are currently erroneously being sent home without treatment. Healthcare professionals are focusing on management of late-stage pneumonia, a respiratory disease, when they potentially should be focused on early-stage blood disease. Could further concerted international research be accelerated and lead to avoiding, rather than treating respiratory failure?
This could be a plausible path to explore as it also suggests why chloroquine in combination with other compounds seems to be effective, acting at the blood cell level. It’s one of many hypotheses being developed across the world in the race to find answers, but a compelling one.
Pandemics happen. Before COVID-19, pneumonia killed 2.5 million people per year, a disproportionate number of children and mostly in Africa. We have dealt with them as a species since the beginning of times. There is no doubt that this one is ugly — fast, unpredictable, ruthless in its elusiveness and speed of contagion. But it is less fatal than other pandemics we have fought in the past and we have inadvertently amplified its power of destruction as a result of the political consequences of the fragility of our global healthcare systems.
If the arrival of a respiratory pandemic was predictable, less deadly than a 100-year-old flu, causing a complication that we should already be familiar with and our response was to shut down the world.. something went terribly wrong, and most importantly where do we go from here.
The ultimate outcome is complicated by the notion of trust.
Of Trust
In an era of Big Data, it is baffling that our governments base decisions to shut down global economies that are likely to impact several generations — financially, socially and psychologically — on woefully inadequate data. One after the other with a handful of rare exceptions, fuelled by raging, real-time media (real, partially real and fake) headlines, governments have opted to brace for the absolute worst. The data, a few months into the pandemic, remains incomplete and conflicting; from numbers of masks to accuracy of tests to reported deaths, it is wildly diverging and inconsistent. Imperial College in London published a widely read harrowing doomsday piece that influenced many decision-makers including Prime Minister Boris Johnson to change the UK’s policy; A team led by Oxford University followed it a week later with an opposing view that would have backed Johnson’s initial contrarian strategy of herd immunity.
Worse yet, remarkably few autopsies are being carried out as healthcare systems are far too stretched to accommodate them. We still don’t understand enough about how the virus attacks to ultimately cause death, as illustrated by the Sichuan University of Science and Engineering paper. Didier Raoult, the now world-renowned French physician and microbiologist who put forth the suggested combination of chloriquine and azythromycine of as treatment received immense political backlash. Our progress is too slow, too encumbered by red tape and economic interests.
The headlines are exhausting, repetitive and lack context. Isolated headlines taken out of context scare the public to #staythefuckhome and “flatten the curve” although that too is debated. Reckless media and faulty data also risks displacing the problem from a viral infection most health care systems were not prepared for (a serious political problem) to increasing restrictions being imposed causing an actual economic depression (now a serious social problem, featuring brutal mental and financial distress). From a spike in instances of domestic violence to mental health to divorce to bankruptcies, to entire industries or economies collapsing, we have only seen the tip of the isolation iceberg if we continue much longer on this path.
Some governments felt they had no choice, being presented with inadequate but extremely frightening data, all pointing to the collapse of healthcare systems funded by tax-payer contributions.
But not every country has opted for such drastic measures. Much to the surprise of its neighbours, Sweden weighed the cost-benefit analysis of a complete economic shutdown and opted to delay that decision as much as possible. So far, their strategy has not backfired.
At the heart of the issue remain several uncomfortable truths. My mother, a journalist in the 1980s, was already at the time concerned with our overpopulation of the planet. A somber premonition. We have nearly doubled in numbers since that decade. Today we are facing exhaustion of resources through relentless consumerism, fuelled by a digital revolution that enables constant interconnectedness but also the aspiration for more consumption. From junk food to junk fashion, we demand endless quantities of choice, translating in unacceptable levels of energy and resource consumption (and waste as a byproduct).
In the early 2000s my father took a biotech company public before undergoing the opposite exercise of a management buy-out. He remarked at the time that despite the achievement of an IPO, the ever-coveted exit strategy of privately held companies, the pressure to produce quarterly earnings as a listed company in the healthcare industry was nonsensical and resulted in bad decisions. One of the fastest ways to produce quarterly growth at a global scale is of course to push for consumption, more and faster. As the number of humans on the planet continues to rise exponentially and we progressively push back life expectancy, our health care and pension systems have been stretched to breaking point. This is nothing new. In 2009, a pension fund executive at JPMorgan’s annual Gleneagles Pension Summit remarked publicly that the looming global pension crisis would one day open the debate as to whether voluntary euthanasia would be a more acceptable solutions as we ran out of the other tools (the other obvious two being raising the retirement age or lowering the payments given that we have operated for years in a desperately low interest rate environment). The comment was controversial at the time but not countered. The audience was silent.
Despite aspirations to create global commercial brands we have not taken any measures to create global support systems for the elderly, the sick and the vulnerable. Bill Gates touched on the gaping need for a global effort 5 years ago. The World Health Organization is no better capitalized than a large corporation and it has now become apparent that some healthcare systems were one virus away from the brink of collapse.
The parody of country-by-country failures in the healthcare, social, political and economic systems would be an interesting exercise in anthropology if it were not so tragic. In Europe, could we not have predicted that Germany would fare extraordinarily well in planning and execution, while Italy and Spain struggled to cope given social and family constructs and state of capitalization of their healthcare systems? The current US president, for his debated strengths and weaknesses, was never going to be the best candidate to lead the country through a pandemic.
Basing very grave decisions on data that we cannot rely on threatens to shake humanity to its core. The very concept of value is based on trust, the value of your home, of your paycheck, of a bank note, of your taxes going to a healthcare system that won’t fail you. Without this trust in “the system”, we risk civil uprising and the complete collapse of our civilization as we know it.
Of Virtual Assets
One popular tagline, which celebrities seem to be particularly fond of these days on social media, is that this virus levels the playing field, that it hits everyone equally, and no one is safe (even Prince Charles). This pandemic that we were shamefully unprepared for has actually done quite the opposite. The virus may be indiscriminate, but the decisions taken by our respective governments have flashed a big bright light through the cracks of disparity across our society. We are not able to isolate in the same way (sitting by the pool in Bel-Air versus being crammed in a slum in Mumbai suggests isolation comes in starkly different iterations). We don’t have access to the same level of protection or healthcare, we don’t have the same level of risk of dying based on age and predispositions and we don’t all have families to care for or be cared by under one roof. We won’t come out of this fairly, equally, our socio-economic inequalities across the globe are more evident than ever as a result of the virus and our collective actions as governments and citizens.
The discussion of financial inclusion is one that has preoccupied the United Nations and World Bank for years; the view that access to safe and secure financial services should be a basic human right. It is interesting to turn this question to the US in the current state of affairs, if only to understand the scale of the problem of global financial inclusion when viewing it from the perspective of arguably one of the world’s most developed nations.
The US is facing an unexpected challenge: after proposing a $2 trillion economic stimulus package to send out cheques to American tax-payers who may be facing economic hardship as a result of the outbreak, the complicated question of how to get the money to non-tax-payers was debated. It is estimated that 44% of Americans do not pay any federal income taxes.
In most cases the tax returns are filed but the income is too low. In other cases, tax returns are simply not filed. Some are college students, others dependent or disabled adults. The Trump administration clarified its stance on Social Security recipients but imposed a simplified tax filing requirement on the remaining individuals for 2019 in order to receive the stimulus check. This will present a significant problem for many. The Federal Deposit Insurance Corporation estimated in 2017 that 6.5% of Americans remain unbanked. This represents 8 million households, a population even less likely to file tax returns without even so much as a bank account.
These are the households who are also most likely to be the population without adequate private health insurance, which is particularly painful in the US, where access to public healthcare is very limited at the best of times. Getting relief in the form of money to these households quickly and safely is a monumental emergency and one that the current administration will struggle to meet easily.
One of the most remarkable use cases of blockchain technology is the possibility of creating virtual currency, or a token of exchange, that could help achieve the United Nations’ goals of financial inclusion. Regulatory bodies around the world have recognised this and insist that regulation is not there to stifle innovation for this very reason.
A version of the US stimulus bill that made a push for the creation of a digital dollar platform was originally backed by powerful Democrats, but it was ultimately abandoned in favor of relying on tax identities and bank accounts, leaving many of the most vulnerable still exposed.
If the US is already facing these challenges, regions like India and Africa, where unbanked populations are multiples of the US are exponentially exposed on a variety of fronts.
Bill Gates made some inspired suggestions on how to build a warning and response system for pandemics in a paper published by the New England Journal of Medicine, covering topics such as authority, funding, scalability and reserve personnel. He discusses strengthening healthcare systems in lower and middle income countries.
Ability to deploy financial resources virtually, instantly, securely and cheaply, should be a natural extension of this work.
Much has been made of the intrinsic value of bitcoin, the original and largest digital currency, which is about to undergo another halving event in May, largely anticipated to increase its value prior to the pandemic. The total number of circulating Bitcoin is finite by design, which should make it rise over time due to scarcity. The thesis for Bitcoin is reinforced by the current contrast of governments literally printing money, interest rates getting slashed and the world facing significant inflationary risks across the globe. Bitcoin has its challenges, not least the amount of energy it consumes to continue to be mined as we enter the latter stages of its supply, but it should be studied in this context and improved upon.
When the G20 meets again in July 2020, we can foresee joint mandates to reform global healthcare systems, similarly to what happened to the banking industry over a decade ago. This time, sadly, there will be not one but two very urgent topics for our leaders to tackle. Global pandemic prevention and response, which was an overdue topic.. and the inevitability of a monster recession as countries come to terms with the havoc wreaked in their respective economies across so many sectors, against a backdrop of limited central bank power to intervene. As countries commit to improve coordination of healthcare systems and act in a unified manner, with 30% of the world population remaining unbanked, broad implementation of virtual assets must be part of the discussion. But trust — in government, in fiscal systems and in the economy, may have all but been destroyed and will have to be rebuilt on stronger foundations. Trust in virtual assets faces a different uphill battle but there has never been a more obvious need for collaboration between traditional and virtual markets.
Over the last few years regulation of the virtual asset industry has been a topic of much debate and discord, the more egalitarian among us vehemently opposing the intervention of regulators. However the convergence of the sharpest minds in government, business and technology presents a chance for the human race to repair and future-proof our civilization. Trust and values can be reshaped, and regulation may well have to be a part of this effort. Perhaps we can rise out of the ashes of consumerism and create a more reflective, collaborative, meaningful and productive society. This is a chance for the staunchest of libertarian technologists to step up and contribute to a new paradigm.
I don’t know when I will go to Taiwan again. But I am sure that life won’t have changed so much on this beautiful island and I look forward to seeing my team in person again soon ahead of some upcoming product launches that have not been derailed, against all odds. The Taiwanese, highly organized, principled and hard-working, sailed through this challenge with flying colors.
Taiwan is a chess piece at the center of the geopolitical crisis caused by the pandemic. Shunned by the WHO for being “technically” part of China (per China’s insistence that Taiwan be considered by international organizations as part of the Beijing administration despite its de facto independence), the Taiwanese have firmly and vocally retained their independence and maintained strong ties to Japan and the United States. Taiwan executed outstanding containment measures as illustrated earlier, resulting in just 5 deaths and 322 confirmed cases, but ever the agile manufacturing powerhouse, has managed to ramp up production of masks to 13 million per day as of the end of March 2020. The current Taiwanese administration pledged to donate 10 million masks to countries in need of which the EU stands to receive 7 million. This amounts to over three times the amount pledged by China. Taiwanese president Tsai Ing-Wen added in a recent statement “At the previous stage, we formed a national team, now we need to play an international match and fight the pandemic together with other countries”. Tsai was fresh off the election trail in January as she was re-elected and immediately prepared to battle a pandemic that would scathe the world just a few weeks later.
With a long history of outstanding health care services and several prominent government officials with medical backgrounds, Taiwan seems to have had a head start despite being significantly geographically and politically disadvantaged.
Echoing UN Secretary General Antonio Guterres’ words at the launch of the UN Report on Socio-Economic Impact of COVID-19 on March 31, 2020:
“What the world needs now is solidarity”.
We have too much at stake, and too much to learn from each other.