Ethan Buchman, the CEO of Cycles Protocol and co-founder of Cosmos, recently sat down for an exclusive interview with Matt Zahab on the Cryptonews Podcast. During the interview, Buchman discussed various topics including the creation of an internet of blockchains, the true nature of money, and the concept of collaborative finance.
Buchman explained that the motivation behind creating Cosmos was to establish a platform that prioritizes sovereignty, interoperability, and accessibility for communities worldwide. Unlike traditional approaches to building blockchains, Cosmos aimed to create a more generalized platform that allows users to build applications in a way that makes the most sense to them. This approach gives communities the freedom to make their own choices, run their networks as they wish, and serve their communities without being subjected to the oversight of other networks.
Furthermore, Buchman emphasized the importance of understanding the concept of money. While many people view money solely as a means of payment, Buchman highlighted that a significant portion of money is actually based on credit. In various financial transactions, there is always a moment when someone owes something to someone else. This interconnected nature of debts can create inefficiencies and liquidity problems within the network. However, Buchman believes that by becoming aware of the network structure of these debts, it is possible to clear payments without the need for additional money or by using less money. This approach can help reduce leverage, risk, and create more accessible forms of working capital.
Buchman also addressed the importance of considering both the asset and liability sides of the balance sheet when it comes to money. While many people in the crypto industry focus on the asset side, Buchman argued that the real power of banking lies in the ability to clear liabilities and reduce debt with minimal amounts of money. This function of clearing debts is not accessible to anyone else but bankers. However, the Cycles Protocol team has developed an open clearing protocol that aims to clear the most debt for the most people with the least amount of money. This protocol opens up new possibilities for issuing different kinds of money and using various currencies to settle debts.
In conclusion, Buchman expressed his belief that Cycles Protocol is the future of collaborative finance. By optimizing the use of different assets for payment and leveraging the structure of the debt graph, Cycles Protocol offers a promising solution for reducing risks and improving the efficiency of financial transactions.
During the interview, Buchman also touched on various other topics such as his early experiences with Bitcoin and Ethereum supporters, the historical significance of banking, and the advantages of launching a blockchain on the Cosmos platform.
