Home | MIT Sloan Fellows | Leadership Blog

Yearly Archives: 2019

LabCentral to Advance Biomanufacturing Ventures in Kendall Square

LabCentral 238 at 238 Main Street in Kendall Square will open in the fall of 2021. Photo credit: Encore & Perkins+Will

Already dubbed the most innovative square mile on earth, Kendall Square is about to add another notch to its ingenuity quotient. LabCentral has announced its intention to essentially double its Kendall Square footprint in 2021 with the establishment of a new incubator focused on scale-up biomanufacturing. LabCentral 238—the name is a nod to its 238 Main Street address—will feature 100K square feet of shared office and laboratory space where companies can conduct process development studies. Unlike the original LabCentral incubator, LabCentral 238 will host startups that have cleared preliminary research hurdles and are headed eventually for clinical trials. The new venture will be developed on a site located on two floors of the 100-year-old Kendall Building. Distinguished by its historic clock tower, the building is being expanded to 12 stories with an adjacent addition. The German pharmaceutical powerhouse Bayer AG is expected to occupy a large swath of the space.

Astellas Pharma invests $12.5M in LabCentral 238
The LabCentral 238 initiative is made possible by a $12.5M investment from Tokyo-based pharmaceutical company Astellas Pharma and a grant from the Massachusetts Life Sciences Center. MIT Sloan Fellows Program alumnus Percival Baretto-Ko SF ’11 is Astellas Pharma president. The company will invest an additional $450K over three years to become a Gold Sponsor of LabCentral’s existing Kendall Square incubator at 700 Main Street, which has grown rapidly since it was established in 2013.

LabCentral 238 will make prototypes of the drugs on a fast track and at a lower cost. The drugs won’t meet the standards needed for clinical trials, but if a product seems promising, the startup will pay manufacturers to produce them at the necessary standard for clinical trials. Producing lower-cost prototypes at a faster rate will mean a greater number of life-saving drugs have a chance of reaching consumers sooner.

LabCentral takes inspiration from the energy of its neighborhood at the edge of the MIT campus and the legacy of innovation that preceded its tenancy. Its 700 Main Street location is the very place where Thomas A. Watson received that legendary first long-distance phone call in the 1800s. A century later, Polaroid founder Edwin Land established an office here. Today, more than 300 scientists and entrepreneurs from 70 startups rent lab benches and office space at 700 Main.

“We need more access to innovative startup companies,” Yoshitsugu Shitaka, president of the Astellas Institute for Regenerative Medicine, recently told the Boston Globe, “especially in the cell therapy and gene therapy space.” The two LabCentral incubators should do just that. Young biotech enterprises are drawn to the extraordinary amenities, including access to millions of dollars in laboratory equipment and face time with local drug developers. For global biotech companies like Astellas, the LabCentral cluster is a hothouse worth watching.

Read the Boston Globe article on LabCentral 238.

Finalists in the MIT Solve Challenge converge on New York

The MIT Solve Challenge, the legendary social impact pitch competition, reached its much-anticipated conclusion on September 22 during UN General Assembly week in New York City. A diverse group of 60 finalists will converge to present solutions around four global issues posed back in May. More than $1.6 million in funding will be available for the selected Solver teams.

MIT Solve advances sustainable solutions proposed by tech entrepreneurs to address the world’s most pressing problems. It issues four global challenges each year. In 2019, those challenges are the circular economy, community-driven innovation, early childhood development, and healthy cities. The goal is to identify the teams that show the most promise to solve some aspect of the challenge and drive transformational change. MIT Solve then links the innovators to its global partners—private, public, and nonprofit leaders that can help make the often audacious visions a reality.

The innovators who have reached the finals in New York will pitch their ideas to a live audience as well as a panel of judges. Those selected will work closely with Solve partners—cross-sector leaders like Starbucks, HP, Johnson & Johnson, and Save the Children. These partners will help the innovators pilot, scale, and implement their tech-based solutions.

Past Solve participants have included Canadian Prime Minister Justin Trudeau, Queen Rania Al Abdullah of Jordan, Amina J. Mohammed, Deputy Secretary-General of the United Nations, Eric Schmidt, technical advisor and board member of Alphabet Inc., Google’s parent company, Indra Nooyi, the former chairman and CEO of PepsiCo, and cellist Yo-Yo Ma, curator of the MIT Solve Arts and Culture Mentorship Prize.

The MIT Solve Innovation Fund
MIT Solve made headlines in the spring when it announced the launch of the Solve Innovation Fund, a $30-million-dollar philanthropic venture fund that will invest in early-stage entrepreneurs who appear poised to solve a global challenge. Noubar Afeyan, a member of the MIT Corporation and the founder and CEO of Flagship Pioneering has already committed up to $3 million to the fund.

“Solve’s mission is to tackle global challenges by helping early-stage innovators from all around the world connect with each other, tap the strength of MIT’s innovation ecosystem and, crucially, gain the resources to transform their ideas into impactful solutions,” said MIT President L. Rafael Reif. “The Solve Innovation Fund is an inspiring step to providing Solver teams with the capital to deliver their solutions at scale.”

Learn more about attending the MIT Solve finals—and about participating in the next round of challenges.

Bloomberg announces $500 Million Climate Change Initiative

Michael Bloomberg

“Fifty years ago next month, the Apollo 11 lunar module touched down on the moon. It’s fair to say the crew never would have gotten there without MIT,” Michael Bloomberg told the assembled at MIT’s commencement ceremonies this month. “I don’t just mean that because Buzz Aldrin was class of  ’63 here and took Richard Battin’s famous astrodynamics course…the Apollo 11 literally got there thanks to its navigation and control systems that were designed right here at what is now the Draper Laboratory.”

Bloomberg’s compelling address was packed with perspectives about history and science, leading to blunt observations about the race to combat climate change—and an announcement that he is putting his money where his mouth is. He revealed that his foundation Bloomberg Philanthropies, which has been working for years to rally cities, states, and businesses to get serious about climate change, is committing $500 million to the launch of a new national initiative called Beyond Carbon. The goal: to move the U.S. toward a 100 percent clean energy economy as expeditiously as possible. “We intend to succeed,” he added, “not by sacrificing things we need, but by investing in things we want: more good jobs, cleaner air and water, cheaper power, more transportation options, and less congested roads.”

An immediate and inescapable challenge
Climate change, he noted, is today’s equivalent of the man-on-the-moon challenge—but with greater consequences—the future of humanity. “Our most important and pressing mission…is not only to explore deep space and reach faraway places. It is to save our own planet, the one that we’re living on, from climate change.”

He told the audience of graduates and their families that scientists and technologists have already pioneered the technology to tackle climate change—to power buildings with solar and wind power, to power vehicles with batteries charged with renewable energy, and to power factories and industry using hydrogen and fuel cells. He added that such innovations don’t require an economic sacrifice. “Just the opposite, these investments, on balance, create jobs and save money.”

The question he posed to the commencement audience: “Why the hell are we moving so slowly? The race we are in is against time, and we are losing. In the past decade alone, we’ve seen historic hurricanes devastate islands across the Caribbean. We’ve seen ‘thousand-year floods’ hit the Midwestern and Southern United States multiple times in a decade. We’ve seen record-breaking wildfires ravage California, and record-breaking typhoons kill thousands in the Philippines. This is a true crisis.” Scientists, Bloomberg said, understand that there can be no delay in taking action.

In response to those who believe that climate change is only a theory, he quipped. “Yeah, like gravity is only a theory. People can ignore gravity at their own risk, at least until they hit the ground. But when they ignore the climate crisis, they are not only putting themselves at risk, they are putting all humanity at risk.”

Learn more about Bloomberg’s speech and his plans for Beyond Carbon.



If you are what you drive, will you exist in ten years? Three auto-industry experts have some ideas about that.

According to MIT Sloan Professor Erik Brynjolfsson, director of the MIT Initiative on the Digital Economy and coauthor of Machine, Platform, Crowd: Harnessing Our Digital Future, “If you want to understand the connected, intelligent, and personalized future of urban transportation, and help shape it, then read this book. There’s no one on the planet who I would trust more to explain this revolution than these authors.” The book is Faster, Smarter, Greener: The Future of the Car and Urban Mobility. The authors: Venkat Sumantran, auto industry veteran and Chairman of Celeris Technologies, Charles Fine, MIT Sloan professor and founding president of the Asia School of Business in Kuala Lumpur, and David Gonsalvez, CEO and Rector at MIT’s Malaysia Institute for Supply Chain Innovation.

Published by MIT Press in 2017, the ideas put forth in Faster, Smarter, Greener have been rippling through the transportation industry, changing the way people think about automobiles and driving. Sumantran, Fine, and Gonsalvez are all industry experts, and they predict fast-moving changes in 21st-century transportation. The way they see it, urban planners are shifting from designing cities for cars to designing cities for people. Societies are gearing up to charge user fees and offer subsidies to encourage consumers toward more sustainable practices. And the sharing economy is coaxing many consumers to shift from being owners of assets to being users of services. The auto industry is responding with connected cars that double as virtual travel assistants and by introducing autonomous driving.

Smartphones vs. Smart Cars
How did we get here? The authors note that while the 20th century was the century of the automobile, the 21st will see mobility dramatically reenvisioned. Cars altered cityscapes, boosted economies, and made personal mobility efficient and convenient during our century-long love affair with the automobile. But today, the authors say, people are more attached to their smartphones than their cars. And that change is not just about the fickle affections of consumers. Cars are no longer the quickest mode of travel in cities, and vehicular emissions pose an increasingly ominous threat to the planet.

Sumantran, Fine, and Gonsalvez believe that an innovative mobility architecture must be developed to meet the needs and expectations of an era with new social and economic realities. Faster, Smarter, Greener charts a course for achieving it. The authors envision a new world of mobility that is connected, heterogeneous, intelligent, and personalized (CHIP architecture). CHIP architecture embodies an integrated multimode mobility system that builds on ubiquitous connectivity, electrified and autonomous vehicles, and a marketplace open to innovation and entrepreneurship. Consumers will exercise choice on the basis of user experience and efficiency aided by “intelligent advisors,” accessible through their mobile devices.

Learn more about Faster, Smarter, Greener: The Future of the Car and Urban Mobility.


Blockchain: Virtues and Vices in the Cryptocurrency Realm

MIT Sloan Professor Simon Johnson, Faculty Chair of the MIT Sloan Fellows MBA program

According to Deloitte’s 2019 Global Blockchain Survey: Blockchain Gets Down to Business, the world’s most inscrutable technology is rapidly gaining traction in the enterprise sphere. Authors Linda Pawczuk, Jonathan Holdowsky, and Rob Massey note that business leaders are no longer asking whether blockchain will work—they’re asking how it can work for them. Their survey revealed that 86 percent of senior executives believe that blockchain will eventually achieve mainstream adoption, and a stunning 83 percent say their enterprises see a compelling business case for blockchain. On the cryptocurrency front, Facebook’s launch of Libra signals a belief in its ability to compete with established global currencies.

In researching this issue of the MIT Sloan Fellows MBA Program Newsletter, we found similar optimism around the future of blockchain. We pick up where we left off in our last issue, which was dedicated to non-currency models for blockchain, and delve deep into cryptocurrencies themselves. We have reached across the MIT Sloan Fellows network to get firsthand accounts from alumni and faculty who are researching or inventing with blockchain.

MIT Sloan Senior Lecturer Michael Casey explores how bitcoin fits into the history of currency—and what it means for the world’s five billion unbanked people. Silvana Lopez, SF ’16, cofounder and CEO of The Blockchain Challenge, takes up that theme and talks about how cryptocurrencies are pivotal to sustainable development. Jennifer Hongbo Jiang, SF ’17, explores trust issues regarding bitcoin, while Alin Dragos, SF ’17, head of strategic partnerships at the MIT Digital Currency Initiative, looks past bitcoin to a world with multiple cryptocurrency platforms. Prema Shrikrishna, SF ’17, illustrates how societies might correct imbalances of economic power through cryptocurrencies.

We’re already at work on the next issue, so enjoy your summer and know that a new set of intellectual adventures awaits you in the fall. If you’re not on the mailing list, you can right that wrong right now.

In Algorithms We Trust

MIT Sloan Senior Lecturer Michael Casey

“When I confessed on air that I only began to understand the true nature of money after researching cryptocurrencies, it instantly became a headline,” says Wall Street Journal currency reporter and MIT Sloan Senior Lecturer Michael Casey. He made the remark during a 2016 interview with host Laura Shin for the Forbes unChained podcast. “I’m sure some people were shocked and others amused, but I think anyone who listens to the full podcast will appreciate where I was coming from.”

During the interview, Casey reflected on the wholly irrational habit we have of thinking about money as a real thing. “What we conceptualize as a dollar, a euro, a renminbi is actually a complex—and invented—social system for tracking our debts to one another,” he says. One consequence of this epiphany for Casey was that it transformed him from a blockchain skeptic into a blockchain advocate.

A lesson from the history of money
In The Age of Cryptocurrency: How Bitcoin and the Blockchain Are Challenging the Global Economic Order, Casey and coauthor Paul Vigna note that, for most of its history, currency has been issued by emperors, monarchs, dictators, and democratically elected governments. Those rulers have consistently stamped their images and symbols of authority on bills and coins, reminding citizens of the deep societal connection between money and centralized control.

“The value of a dollar has grown up around a common and quite reliable societal consensus about what underpins it and how much you can redeem with it,” says Casey. “It’s a story we tell that has no intrinsic truth, just a shared understanding. But to function smoothly, our system also requires the authority of governmental entities and the services of trusted intermediaries such as banks. We could not have built our civilization without them.”

But breakdowns such as the 2008 global financial crisis demonstrate how vulnerable our existing model is when trust begins to erode. The crisis also opened people’s minds to innovation. Many became convinced that traditional currency systems, which dominate current global economic activity, should no longer be relied upon as the sole viable option for how we represent and organize the exchange of goods and services.

A new symbol of shared truth
Most of us were raised to view our omnipresent financial institutions as trustworthy keepers of shared truths about our debts and payments. We’ve also accepted, albeit grudgingly at times, the fees that banks and other intermediaries charge for maintaining accurate ledgers of our transactions. Few believed we could create an efficient, viable alternative. That made us dangerously dependent upon the specialized keepers of trusted transactions—bond and securities brokers, insurance agents, financial lawyers, payment processors, and credit card companies.

The advent of cryptocurrency, however, has introduced the prospect of a dramatic shift in the existing balance of power. As Casey and Vigna explain in The Age of Cryptocurrency:

The simple genius of this technology is that it cuts away the middleman yet maintains an infrastructure that allows strangers to deal with each other. It does this by taking the all-important role of ledger-keeping away from centralized financial institutions and handing it to a network of autonomous computers, creating a decentralized system of trust that operates outside the control of any one institution.

Possibilities abound
“Thinking of bitcoin and other cryptocurrencies as alternatives to the dollar is the least interesting—and least useful—possibility for blockchain technology,” Casey says. “Many of the countless token systems out there are actually smart contracts that exist for the purpose of running blockchains. Those blockchains function as incentive systems that run in a decentralized fashion around a particular objective.”

One example Casey cites is Basic Attention Token (BAT), a blockchain-based digital advertising ecosystem that is built on top of Ethereum. “The BAT utility token works as a governance system for the media world,” explains Casey. “In the BAT ecosystem, publishers earn BATs from advertisers based on the amount of attention users give to the ads. Publishers then spend their BATs to publish more content on the platform. Users, in turn, receive some BATs for viewing ads, and they can use those tokens to purchase premium content or services on the platform. That direct exchange of value among the primary participants eliminates the costs associated with intermediaries in traditional media ecosystems.”

Casey also sees enormous potential in cryptocurrency to move value between native currencies without the expense and friction of intermediaries. “The World Bank estimates that 1.7 billion adults worldwide don’t have access to bank accounts,” he says. “That means that when family members earning money abroad want to transfer some portion of it back home, they must pay exorbitant fees. Developers now are exploring the use of blockchain technology to move funds across the world phone-to-phone—with Facebook’s Libra project being the latest to dive into this financial inclusion push. These ideas threaten to disrupt the existing financial-institution architecture, but that may be a small price to pay for onboarding billions of hitherto excluded people into the global digital economy.”

Bad News for Autocrats

MIT Sloan Professor Simon Johnson, Faculty chair of the MIT Sloan Fellows MBA program

MIT Sloan Professor Simon Johnson, Faculty chair of the MIT Sloan Fellows MBA program, thinks researchers, technologists, academicians, and entrepreneurs are overlooking a crucial aspect of cryptocurrencies. Amidst thousands of ongoing discussions about the uses, abuses, and transformative effects of cryptocurrency technologies in commerce and finance, he notes that very few people are considering its likely effects on politics around the world—especially in societies under the control of autocratic regimes.

The topic is timely, Johnson believes, because authoritarianism is on the march worldwide. In an opinion piece for The Business Timeshe cites the most recent Economist democracy index, which indicates that half the countries around the globe were less democratic in 2017 than in 2016. More dire still is the assessment that only five percent of the world’s population lives in fully democratic states.

How cryptocurrencies can resuscitate democracies
One can easily imagine why an autocrat would not want people to have access to potentially untraceable, but secure, digital records. “For starters, with access to such records, a citizen could make payments or donations that bypass the banking system and its embedded surveillance,” writes Johnson. “Rules that restrict political organisation would become easier to defy.”

By way of example, Johnson describes a hypothetical system for collecting, storing, and sharing political grievances and protests that is structured like the user-controlled health-records platform MIT colleagues are developing. “There is potentially no limit to how ingenious people can become with regard to writing so-called smart contracts, which will trigger payments or other transactions (like sending protest messages) when particular events occur,” Johnson contends. “For activists around the world, the only constraint is their creativity.”

Revolutionary models for accessing capital
In a 2018 article for Consensus MagazineJohnson describes yet another paradigm-shifting aspect of cryptocurrencies in general and initial coin offerings (ICOs) in particular. A common feature among various ICOs is how potential investors are wooed by the promoters of these platforms. “While many will describe their tokens…as pre-sold, negotiable ‘products’ with a utility function that gives the holder access to the system’s services,” he writes, “so far the most disruptive aspect of this idea lies in how it changes the fundraising dynamic.”

According to Johnson, an ICO is fairly straightforward in that sense. The developer of a useful technology seeks to prefund it in a manner that shares the resulting value with early users and those willing to provide risk capital. Given that access to capital is a key constraint for such ventures in our economy, “ICOs offer a more direct route for both tapping and deploying funds, for matching founders with investors. That turns out to be quite revolutionary, although also controversial.”

Although many citizens around the world may feel discouraged by recent trends in politics and economics, Johnson believes the momentum may be changing thanks, in part, to the rise of cryptocurrencies. “I would not be surprised if the pendulum begins to shift back in favor of those who would prefer more open systems and a greater degree of productive political and economic competition.”

Simon Johnson’s latest book Jump-Starting America: How Breakthrough Science Can Revive Economic Growth and the American Dream, with coauthor and MIT Economics Professor Jonathan Gruber, examines the lessons of the post World-War II American success story and lays out a plan that will create the industries of the future—and the jobs that go with them.

Making the World More Liquid

Silvana Lopez, SF ’16

“The hype—and occasional hysteria—surrounding cryptocurrency has tended to muddy the waters around blockchain technology,” says, CEO and cofounder of The Blockchain Challenge (TBC). “What sometimes gets lost in the murkiness is the immense potential of cryptocurrency-type applications to transform fundamental economic activities among financially underserved populations.”

When Lopez and TBC cofounder and CTO Natalie Gil, SF ’17, launched their blockchain-based startup in 2018, the possibility of helping stagnant microeconomies become more fluid was an important part of their vision.  “I’m far more excited about how cryptocurrencies can improve the lives of farmers and villagers in developing countries than whether bitcoin will replace traditional monetary systems,” Lopez says.

Where cryptocurrencies and developing economies meet
By convening global interdisciplinary teams—entrepreneurs, programmers, psychologists, economists, and others—TBC is helping to create the “next cool thing” in blockchain while simultaneously enlivening small-scale, regional economic activities. “Cryptocurrency technology can be very useful in promoting sustainable development,” says Lopez. “A tokenized local digital credit system, for example, is more than just a medium for purchasing and saving. It’s also a public window into the economic activity of a community.”

Such windows, Lopez explains, serve to decentralize and democratize access to information that is the basis for fair exchanges of goods and services in market-based economies. “With local blockchain solutions, you give all players—institutional, self-employed, formal and informal sector workers—transparent access to the same supply-chain data, historical pricing trends, crop yields, and so on. Any information that’s relevant to an economic ecosystem can be gathered, verified, secured, and shared with confidence.”

Lopez cites the Peruvian fishing industry as an example of how transparency can empower economic actors in low-income communities. “Most commercial fishermen in Peru are artisans. They don’t necessarily understand how blockchain stores, validates, protects, and tokenizes every activity in the chain from production to consumption. What they do understand is how to use that information to protect their livelihoods by tracking fishing stocks, ensuring regulatory compliance, and getting fair prices for their daily catches. If fishermen find more solutions that help them achieve that, they definitely will adopt them.”

A boost to collective bargaining and liquidity
One of the community-based blockchain projects that TBC collaborated with is Quipu, a local digital market that enables trade through a mutual credit system using a local currency. Quipu features a mobile app that captures real-time transaction data such as the type of goods and services offered and sold, their geolocations, prices, and available supplies. “In the global economy, many low-income communities have suffered from asymmetrical access to this type of information,” explains Lopez. “By decentralizing trading information so that everyone has access to it, individuals responsible for collective bargaining agreements with large external purchasers can negotiate better deals.”

Although Lopez is quick to point out that cryptocurrency technology isn’t the solution to every category of economic activity, she believes it will be transformative in developing countries. “Blockchain and tokenization in small markets change incentive structures and prioritize local producers and consumers in the value chain. Community wealth is enhanced by increased liquidity and transparency. The technology, when deployed with those objectives in mind, can serve as a disruptive tool to build economic justice in low-income regions around the world.”

Humanizing Business Transactions

Jennifer Hongbo Jiang, SF ’17

Like many of her colleagues in the realm of global banking, BlockTEST cofounder Jennifer Hongbo Jiang, SF ’17, was initially skeptical of cryptocurrency initiatives. “I have to confess that within 20 seconds of first hearing about bitcoin, I was sure it was a scam,” Jiang says. A decade’s worth of executive experience at financial giants JP Morgan, Merrill Lynch, and Citigroup had disposed Jiang to be wary of monetary vehicles that appeared impossible to value.

While Jiang never expected to give bitcoin a second thought, the blockchain-based currency came across her radar again when she was preparing a talk on cryptographic technology. “I decided to read the white paper, and I was blown away,” she says. “I realized that it was a genius of an invention. I became obsessed with the technology—though not yet convinced of the value of its potential applications.”

The fun part of blockchain
Not long after her partial conversion, Jiang spent an afternoon with the head of cryptocurrency initiatives at the Central Bank of China. “I was impressed by the level of China’s interest in cryptocurrency. The conversation propelled me on to additional research. When I was accepted into the MIT Sloan Fellows program, I chose a thesis topic that allowed me to dive deep into the consensus mechanism of distributed ledger technologies such as bitcoin.”That experience not only changed my opinion, it changed my entire career path.”

From Jiang’s perspective, the fundamental question that the bitcoin platform solved was how to use technology as a means of establishing trust in a trustless community. “Existing monetary systems incorporate some degree of trustlessness,” she says. “When you walk into a store with dollars in your pocket, it doesn’t matter if you and the cashier are complete strangers. You both trust that the value of paper money is what the government and society say it is. But that trust is founded on those third-party intermediaries.”

For Jiang, the fun part of the bitcoin platform is the condensation of all the system’s digital trust mechanisms into a single element—the bitcoin token. “The value represented in a bitcoin has proven to be an effective incentive for people to behave well and comply with the immutable requirements of the platform,” she says. “The threshold for entry into the system is achievable for a wide swath of the world’s population. That’s what makes cryptocurrencies inclusive and empowering for people who have not been invited to participate in the existing global financial structure. The long-term effect could be to restructure business transactions to look much more like human transactions.”

Defining boundaries for experimentation
Looking to the near future for cryptocurrencies, Jiang is concerned about the lack of clarity from the U.S. Securities and Exchange Commission and U.S. Commodity Futures Trading Commission as well as the lack of coordination with other global regulatory bodies. “I have no doubt that the emerging group of tokens and cryptocurrencies (including recent offerings from JPM Coin and Facebook’s Libra) will inexorably lead to a new theater of virtual marketplaces,” notes Jiang. “We’re struggling, however, to overlay existing regulatory frameworks onto new technology that is useful precisely because of its fluidity. Innovators are reluctant to experiment here because they don’t want to take the risk of getting out ahead of regulations, only to have their efforts nullified by new—and potentially punitive—laws.”

The current state of affairs is driving blockchain developers and entrepreneurs to seek more invention-friendly environments outside the U.S., according to Jiang. “Singapore, for example, has established a national strategy for creating a sandbox environment that attempts to strike a balance of freedom, transparency, privacy protection, and fraud prevention. The National Bank of Canada and the Bank of England also are spearheading initiatives. The global race is on, and the first country that implements a workable cryptocurrency best-practice framework will have a distinct advantage in the global financial system.”

The Real Winners in the Cryptocurrency Battle

Alin Dragos, SF ’17, Head of Strategic Partnerships at the MIT Digital Currency Initiative (DCI), doesn’t read the current narrative of cryptocurrency innovations as a battle among competing token systems to dominate the digital currency landscape. Quite the contrary, he sees the success of multiple platforms as a victory for all of us.

Alin Dragos, SF ’17

“In cryptocurrency and blockchain technologies, we’ve invented a fast, efficient, secure, and transparent way to move value around the world that reduces the current level of friction and intermediation,” says Dragos. “The win here isn’t for any single platform, it’s for everyone in the world who buys, sells, or exchanges anything of value with another person or company.”

Upgrading a very old infrastructure
Dragos and his DCI colleagues—along with many like-minded leaders in technology, business, finance, and public policy—consider the world’s current banking systems to be inefficient and exclusionary. “Many unnecessary costs and hurdles have been introduced over time by intermediaries who no longer add enough value to the system to justify the fees they extract,” he says.

Cryptocurrency platforms are opening up the banking sector to a whole range of new participants. “Many more players can compete to offer accounts and other digital financial services to consumers who currently don’t have access to traditional saving, borrowing, and credit mechanisms,” Dragos notes.“I’m excited that so much innovation is now being driven from outside the established banking sector.”

Transparency, censorship-resistance, and the question of cash
Countries that are struggling with corruption can benefit from the transparency inherent in cryptocurrencies. “The technology has acquired an aura of being untraceable, but that simply is not true,” says Dragos. “Bitcoin, in particular, has gotten a bad rap as being an effective vehicle for money launders. But money laundering is more prevalent in our existing global banking system than it is on any cryptocurrency platform. The difference is that if you do bad things with bitcoin, sophisticated regulatory and law enforcement units will very likely catch you.”

Dragos also likes the fact that any economic activity employing bitcoin is resistant to censorship. “You cannot stop transactions from happening among willing parties, even if you wanted to,” he says. “In that sense, bitcoin preserves a fundamental societal benefit of cash.”

On the topic of cash, Dragos poses an interesting question inspired by the rise of cryptocurrency. “If cash didn’t already exist, would we invent it today? Some countries say yes, but others say definitely no. The next key question is whether we should have the digital equivalent to cash. In its current incarnation, cash comes with certain rights. Should we preserve those rights as we move to digital replacements? We must involve as many people as possible in open discussions of these questions. And we must make sure we carry forward the societal benefits that cash provides.”

The uphill battle to preserve privacy
When it comes to privacy protection, Dragos sees a challenge that reaches far beyond cryptocurrencies. “You can be as privacy-minded as you want, but the world is leaking data in every direction,” he says. “The more you stay online, the harder it is to remain anonymous. Anonymity will be lost without someone caring to protect it. Some people in the blockchain space are being proactive, but this shouldn’t be any one player’s responsibility. If we all advocate for it, we may have a chance of doing better than we are now.”

Dragos notes that blockchain technology has heightened the world’s interest in cryptography. “We see more interest in the field today than anyone has experienced in the last 20 years. It’s really cool now to be a cryptographer, and people who’ve been at it for a long time have a new impetus for their work. Current cryptography techniques were not designed for large-scale deployment, so we have plenty of room for innovation.”

The essential optimism of the MIT Digital Currency Initiative
Dragos and his colleagues at the DCI have made it their mission to create a future in which moving value across the internet is as intuitive and efficient as moving information. “We envision a tipping point where a critical mass of people demand the autonomy, openness, and value-generating capacity inherent in cryptocurrencies,” he says.

Although the technology still has a long way to go, Dragos contends that we’re already better for having it. “We need a great deal of fundamental research and development,  but the genie is certainly out of the bottle. Many smart, well-funded people are determined to make cryptocurrencies work for society at large, and I’m confident it will happen sooner rather than later. Adoption is already nearing tens of millions. In ten years, it will be hundreds of millions. By 2040, I expect it will be billions. Which is all the more reason to be sure we get it right from the start.”