Blockchain technology. What does it’s future hold? According to Grant Blaisdell, Co-Founder and CMO of Coinfirm, just about everything. Blockchain along with its implications will revolutionize the way we transfer and verify internal process. This means that while we may not see these changes, back-end systems handling internal processes will be completely transformed. In the following article we will ask a series of questions to better help understand the future of blockchain technology.
Asking me today, how blockchain technology will transform the market, is like asking someone in 1994 how the internet will change things. Financial technology is only just the beginning, and even then the implications are huge. According to a recent Goldman Sachs Report, financial firms stand to save billions of dollars. Even recently, Dubai announced that by 2020 that they plan to execute all their transactions and all of their documents on a blockchain.
Financial technology (FinTech) is the primary example of where blockchain technology is being applied. The truth however, is that we are only just scratching the surface. Technological adoption moves a lot faster now and will continue to so, but to see the full effect across many industries could take 5-10 years. That depends on a variety of factors.
Compliance is a major factor in the financial system and one of the keys to the commercial and institutional adoption of blockchain transactions. It’s an expensive and tough process, traditional financial institutions can spend around 25% of their labor costs on it while blockchain oriented financial institutions like the exchange Coinbase for example spends around 20%. So we addressed both these issues with Coinfirm. Coinfirm is a blockchain AML/KYC risk and compliance platform that provides seamless and cost-effective compliance for blockchain-based transactions and allows for the adoption of digital currencies and blockchain. The platform applies proprietary algorithms that result in actionable conclusions for AML/CFT compliance, credit risk assessment, and increased efficiency. The Coinfirm platform is also blockchain agnostic, meaning it can be applied to public blockchains such as Bitcoin and Dash as well as private blockchains such as those in development by financial institutions. For traditional sectors like banks, Coinfirm provides data about companies transacting in digital currencies so that institutions can properly assess the risk associated with clients, allowing access to new tiers of clientele.
At the moment, blockchains are for the most part public. This means everyone has a transparent view into the blockchain and the transactions in it. Of course, banks always have been reluctant to share information or be transparent, which helps allow fraud, theft, and money laundering like we’ve seen recently. Realistically, there will have to be a balance in the future.
Take this as an example. Nigeria receives $21 billion in remittances every year. After exchange rates, intermediary banks, and all the other middle-men, you’re looking at on average around 10% in fees. Now imagine applying blockchain technology to this. With P2P transfer and verification of blockchain a transaction taking 3-7 days to clear in the banking system and 10% of the value taken out now turns into a transaction that can take seconds or minutes while holding almost all of the original value. Simply by shaving a couple % off, imagine what kind of impact that has for the people living in Nigeria? Some good examples at how these issues are being addressed for developing markets is Bitpesa and Cashaa.
As mentioned earlier, just about every industry will be affected. Personally having worked in digital media, imagine if artists had access to a transparent and direct way of receiving value and protecting their content with blockchain? With this, they could track and verify royalties on an immutable blockchain across the web, and all with greater transparency. In fact, it’s my opinion that music streaming services as we know them today are only a stepping stone. For example, Youtube takes 40% of ad revenue. Not to be negative, but who verifies this? Blockchain will be able to take these barriers down and add new elements like micro tipping or transactions.
As for other examples, just think transactions and verification. Property transfer, real estate, insurance, health care, any digital asset….you name it. The possibilities are endless. Just watch out for some of the over hype. We’re just beginning to transition into the commercial and institutional main stream.
Grant Blaisdell is a Co Founder and CMO of Coinfirm. The Blockchain AML risk & Compliance Platform, Coinfirm is recognized as growing star in the blockchain and compliance ecosystem and has partnered with leaders in both the traditional and blockchain sectors. Coinfirm is also the team behind the Coinfirm Blockchain Lab. The first of it’s kind in the history of Central Europe, the Lab is a hub for Blockchain knowledge, services and solutions with a portfolio of blockchain products, partners, and experts from around the world. More info at www.coinfirm.io/about and www.coinfirmlab.com