Commentary: What cryptocurrency can learn from traditional markets

Some 8,500 people attended Consensus 2018, the annual cryptocurrency and blockchain summit, in May.

Keynote speakers Fred Smith, chairman and CEO of FedEx, said he sees blockchain as a revolutionary change agent in the transportation and logistics, while Jack Dorsey, CEO of Twitter and Square, said that the internet needs its own native currency.

The crowd’s enthusiasm was fantastic, but a major roadblock remains: The digital currency market structure has not yet been built. Worse, you can’t just use the traditional market structure for non-digital assets as a model, because that old structure is fundamentally broken.

Look at any other asset class and you’ll see the same model: an exchange in the middle surrounded by brokers, settlement and clearing houses, and banks. As a result, there are several participants in every transaction. This model…