A new report from the World Economic Forum predicts that the underlying technology introduced by the virtual currency Bitcoin will come to occupy a central place in the global financial system.
The Blockchain has received what could be termed as it biggest endorsement yet since its creation. In a statement released with this report Giancarlo Bruno, the head of financial services industries, at the World Economic Forum, says:
“Rather than to stay at the margins of the finance industry Blockchain will become the beating heart of it.”
The unique characteristics of the Blockchain makes it impossible for it to be ignored. Rather, it presents a platform where other concepts and technologies can build upon, especially within the global financial system. Cointelegraph spoke to experts about the Blockchain, its implementation and impact on the finance industry.
No need to reinvent the wheel
Speaking to Cointelegraph about this development Simon Dixon, CEO of BnkToTheFuture, identifies the importance of the Blockchain, being the technology behind Bitcoin but he also points out its present deficiencies.
“The technology behind Bitcoin is open source and over 1000 Blockchains exist today. The reason why none of them work at scale or are secure is because the technology behind Bitcoin is nowhere near as valuable as the largest distributed supercomputer in the world securing Bitcoin and the network effect of its miners.”
Dixon goes on to explain that while anybody can copy the technology as you can any open source code, very few will be able to create anything as secure as Bitcoin because it is easier to build on top of Bitcoin.
“Why re-create the internet when it is already being used by everybody? You may have a better feature, but getting everybody to use it is the real value of the internet, just like the real value of Bitcoin is the computer power behind it.”
Bitcoin is already a global phenomenon
In his own analysis Kumar Gaurav, Co-Founder and CEO of Cashaa, identifies the unique characteristics of Bitcoin and its associated technology.
Gaurav also describes what he believes will be the systematic procedure that may lead to the anticipated breakthrough of Bitcoin and the Blockchain into mainstream.
Gaurav tells Cointelegraph:
“Bitcoin is a completely new product which has a number of features that, altogether, no other product has. Bitcoin is cheap, instant, no frills, and cross-border transfer of values without the need of a physical object. Clearly these characteristics pose a number of questions and challenges to public authorities. Can we seriously think that such a high quality product can be banned by the public authorities of all the world? Realistically not”.
Gaurav predicts that Bitcoin will increase its success and matter in people's lives, which will make regulators more active since it is already happening in the sharing economy: Uber and Airbnb share similar regulatory fluid situation.
He continues by saying that to which point Bitcoin will be regulated would be an impossible question to answer. However, he points out that Bitcoin is already a global phenomenon and any strict regulation will only have the effect to make the use of Bitcoin more underground and this is not in best interests of any government.
Therefore there should be a proper balance in regulation which works for everybody.
Immutable and trustless transference of value
Christopher Franko, President of the Borderless Charity, and Founder of Borderless.tech, expresses his total agreement that the Blockchain is on its way to going mainstream.
“Reports by Santander show that by 2022 banks utilizing Blockchain technology could save an estimated $20B in fee's. Whether or not those savings get passed onto customers is up for speculation. Either way, what that degree of savings does is provide an incredible monetary incentive for large banks to adopt some sort of Blockchain technology. By doing so they validate the whole idea.”
Franko identifies certain benefits of the Blockchain to global finance to include immutable and trustless transference of value. He continues by saying that such is the main reason to use Blockchain as opposed to using traditional database architecture.
He says to Cointelegraph:
“Coupled with fault tolerance, it becomes a no-brainer for huge corporations who need 100% accurate, auditable data that is always available. As I have said in previous interviews, big banks ironically don't really trust each other which makes inter-banking collaboration understandably cumbersome and costly to accomplish.”
As honest as maths
Franko concludes by saying that the Blockchain acts as a cost effective and honest arbiter that guarantees every party knows with a finite degree of certainty that every other party is implicitly honest. Not because they are good people, even good people can do dishonest things, but because mathematically it can be no other way.
That's powerful and exactly what our civilization needs in order to get to the next stage of human development.