An Unbounded Opportunity

A Look At The Evolving Blockchain Landscape

Bitcoin was conceived as a peer to peer electronic cash system to allow online payments to be sent directly from one party to another without going through a financial institution. Dis-intermediating FIs and enterprises directly lowers the costs of transactions and allows value transfer without limiting the minimum transaction size, ensures anonymity and enables non-reversible payments for non-reversible services. With cash, these attributes are taken for granted, but Bitcoin enabled these for online transactions with an added advantage in operational transparency. 10 years ago, all of this seemed esoteric gibberish to enterprises as long established business principles have relied on rent seeking to “create shareholder value.” Today, businesses are all in, eager to adapt the principles of blockchain and start moving towards “creating stakeholder value”. In fact, after years of criticizing bitcoin, JP Morgan just admitted that Bitcoin has an intrinsic value.

After the huge economic boom and subsequent crash of cryptocurrencies, enterprises are finding a renewed promise in adapting the principles of disintermediation and P2P transfer of value as they rethink their complex networks of supplier and consumer relationships. The emphasis in the enterprise world is to transparently address conflicts of interest and to have a synchronized ledger or database of transactions. Some of the advances are being led by highly unlikely participants — the Central Banks. Recently, Bank of Canada and the Monetary Authority of Singapore completed a digital currency swap on the blockchain — a first for cross border payments involving central banks.

Microsoft, long held as a company that had fallen behind on the innovation curve has been quietly but steadily sharpening its tools to compete in the decentralized economy. It’s partnership with JP Morgan’s blockchain platform, Quorum, promises to take on the enterprise world in a big way. Quorum boasts a list of 220 banks that have signed up on their Interbank Information Network (IIN) and the companies have spent enormous time and resources in catering to their need for security and regulatory compliance. Close on the heels of Microsoft is Facebook, with its announced intentions of creating a stablecoin to facilitate mobile payments.

At Proteum, we believe that the combination of blockchain technology with advances in mobile communications will usher new unbounded opportunities for enterprises and entrepreneurs alike. As 5G technology rolls out bandwidth is no longer a limitation. Mobile devices will be permanently and simultaneously connected to various affinity networks. In such an environment, where real time operations are critical, blockchain technology will be increasingly looked upon as an enabler for secure, transparent and trusted interactions amongst the network participants.

Telecom incumbents perhaps have the most to gain from this shift as they sit at a unique intersection of technology infrastructure, consumer information and payment systems. With such a diverse stack, operational efficiency is a challenge. Blockchain technology enables a simplification of services, where the network operator finds new business models: a cross-country secure identification system, a payment gateway for digital asset transaction, derivative applications for IoT and industrial systems to create collaborative ecosystems etc.

With a proliferation of various blockchain platforms, there is already a need being felt for interoperability. Blockchain platforms such as Cosmos provide exactly the framework to build commercial applications on. With backing by Binance, the largest crypto exchange, Cosmos launched its native token ATOM to work towards interoperabilty and scalability — two big challenges for blockchain systems. With their vast infrastructure and roaming contracts, telecom operators are interoperable globally and they can play from a position of strength, creating their own open financial system. .

Out of all these building blocks, [you’ll be able to compose] an entire … open system of finance that operates to scale and can be composed of individual, specialized chains that do different things.

— Zaki Manian, Tendermint, commercial arm of Cosmos

The above is but a flavor (not an exhaustive commentary) of the activities steering enterprise applications that are being reimagined or supercharged with blockchain technology. We are moving into a phase of slow but steady adoption that will only accelerate as traditional business models give way to transactional ones that create value for the ecosystem stakeholders.

Originally published at https://proteum.substack.com.