Blockchain is here and it is here to stay!
Future is here
What could you do for a minute of your office time 25 years ago?
Not much, we must all agree. And today ? Imagine if you have said to someone back then that pretty soon he will be able to make correspondence from Cyprus to his Hong Kong partner through electronic mail within 60 seconds? Would this sound like a distant future to him? Or imagine explaining him that in no time we will have devices (that we still by habit usually call “phones” even if we are aware of the fact that their abilities are far beyond this simple feature) that will replace our cameras, stereos, road maps, paying methods, books, letters… we could carry on with examples for a while…
Like it or not, Artificial Intelligence and project called “Internet of Things” will take over the world and Blockchain technology is foundation of this future.
Demystification of blockchain
Lack of knowledge, false marketing, not small number of ICO scams and finally enormous volatility of cryptocurrencies made a very bad name to Blockchain technology in previous year. Also, fact that understanding this complex technology is not easy, made people think that whole “bitcoin rush” is one big fraud, another pyramidal system or even a virus to economy.
Blockchain apologists then faced a demand for proper education about what blockchain is and most importantly what blockchain isn’t.
Since majority of you who are reading this text already have some basic knowledge about how technology works, let me just tell you one interesting fact-you really don’t need to know how cryptography works in order to accept blockchain. How come? Well I am pretty sure that also majority of you don’t know exactly how sound system works in your car but that does not stop you from enjoying music on your ride home.
Let me help you on that how you should think of blockchain if you are not software developer or similar. You should not bother yourself about algorithms, asymmetric cryptography etc.
Let’s just focus on things blockchain brought for us: immutability and inerasability of data once placed on chain, virtual machine that can run any program, distributed ledger and it’s transparency, time stamp and security of data (referring mostly to Bitcoin and Ethereum).
When we know all this features of blockchain, just then we can start fruitful thinking process of how some of this features (or all of them) can help and improve our business.
We live in a data-driven world, and blockchain is helping us eliminating redundancy, controlling our own data and increasing efficiency in every day life.
Why you should implement blockchain in your corporate strategy
One of the main reason why major companies in the world are so successful is because they are smart enough to understand that key for constant progress is keeping up with disruptive technology and new, shapeshifting ideas.
Blockchain is definitely one of them. Most of large companies that were too arogant or too cautious to embrace the new technology are now far from top. Remember Nokia?
If you still think that all mentioned above is still in domain of philosophy and wishful thinking about blockchain, again let me remind you on some already yesterday’s news.
JP Morgan, Facebook, HSBC, ING, Deutsche Bank… all this major companies and financial institutions started implementing blockchain in their business strategy. 14th of May 2018 HSBC has announced that they made first trade finance transaction using blockchain. HSBC has issued letter of credit to US food company Cargil carrying soybeans from Argentina to Malaysia.
The lender was Dutch bank. This procedure usually takes great amount of time and a lot of paper work. Through blockchain this process was finalized within a day.
Examples like this are encouraging blockchain implementation in trading system in order to push forward international trading.
Also, HSBC claims that they had settled FX deals worth $250bn on Blockchain in last year. Goldman Sachs–one of the world’s biggest banks–has built its own blockchain. The Australian government has signed a $1bn deal with IBM to bring blockchain to the public sector. The United Nations has launched an initiative to improve humanitarian efforts using blockchain technology.
The city of Dubai announces it will be the world’s first blockchain-powered government.
If all this major companies understood simplification of global trade on blockchain and started using benefits of blockchain technology, don’t you think you should consider educating yourself and your team how can your company benefit from it, and how can you implement this disruptive technology to your cause?
GDPR & Blockchain
GDPR was finally enforced in May 2018. and it is still a hot topic since compliance with this directive will be a lot of trouble and lot of changes for many companies and financial institutions.
GDPR has a goal to protect and empower individuals in EU and EEA to gain back control over their personal data. All companies that are collecting and storing personal data is affected by this directive. No need to say that fines for violating this regulation are not small at all, 4% of annual turnover or $20 million which ever is greater.
Recently, Google was fined by 50 million euros for violating this regulation. Fine was issued by French data protection regulator who accused Google for not having easily accessible and transparent data consent policies.
Any data collecting company that fails to provide enough information to users about how their data is being used will be fined.
This can make significant problems to the banks and their KYC & AML process. Banks are obliged to collect a large amount of data for every client in order to execute KYC process. Also, if client is interested in any other service of the bank, let’s say after opening an account client wants to take a loan, bank will have to transfer client’s data from one department to another and to undergo the whole long process again and of course again to request consent and bunch of paperwork from client. Bank can not share client’s personal data to any third party and also has obligation to give to the client copy of his data stored in bank’s files.
This is where blockchain technology steps in. As mentioned in the beginning of this article, I won’t be going deep into cryptography to explain the whole thing, but I will just briefly explain potential of blockchain implementation in this case.
Now imagine that every single person has it’s own personal data stored on blockchain (i.e. Etherum network). This data is 100% secure and only the person who has the private key (access to data) can see it. Again imagine this as a space where you can store all your personal data including your id, passport, university degree, medical record, driving license…basically anything you want. When client wants to apply for any service in the bank, all he has to do is allow the bank to see needed information. Every single time when client’s information is needed, client gives a consent through his personal smart phone to the bank to use his information.
If bank wants to share clients data, it can only share the clients public key (address where data are stored). In this way anyone who tries to access the data would first have to get a consent from a client. Every client has control over his personal info and not just that, code that runs this protocol on the chain is giving to the bank only necessary information, not all of them.
In example, bank’s policy might be not to give loans to anyone who is minor, so in order to check this information bank used to ask date of birth of a client. But with blockchain, code will give to the bank only the answer “YES” if client is over 18 years old or “NO”| if not. This way client has the highest level of privacy and he is personally choosing what information about him will he share and with whom.
There are many platforms providing this service to the banks and also there are already many major banks implementing this system in order to comply with GDPR regulation, to facilitate their business and to provide the best possible service to their customer.
Some predictions says that Blockchain could be used by more then 50% of all companies within just 3 years. Will you follow the trend or stay behind?
Join the decentralized side.
