Blockchain will revolutionize the Internet

Authors: Tomasz Soroka

12.06.2018
Get to know a technology tailored to the needs of startups in the fintech industry.

Bitcoin's success sparks the imagination of investors who want to follow in the footsteps of the world's most popular crypto currency: if you invested $100 in BTC 6 years ago, today you would be able to afford a new Rolls-Royce and several Porshe 911s (or withdraw $1.5 million). How can you currently use blockchain to achieve a similar return on investment in the near future?

Blockchain is the technology behind every popular crypto currency. Simply put, this is a decentralized, distributed, and automated database where every message is left behind and is visible to all authorized users. The distributed registry functionality is similar to editing a Google Docs document; authorized users can make changes to a file that is not physically stored on their computers, and each change is stored in the edit history, which ensures full transparency of the work.

Why the global blockchain excitement?

According to a recent report by PwC Global Fintech Report , 77% of global financial institutions plan to introduce processes based on distributed registry technology by 2020. At the same time investors are drawn to emerging blockchain-based startups, which are popping up more frequently. So, what’s pushing giants like Goldman Sachs and Credit Swiss towards a virtual platform created and used by online geeks? The answer to this question is complex, but here are at least five reasons why both large corporations and new entrepreneurs should turn to this innovative technology:

1. Yes it’s obvious, but needs to be said: transactions in Bitcoin

In an era of constant reporting on speculations in the currency crypto market, it is easy to forget that Bitcoin is primarily a means to make payments. If you run an Internet buisness, regardless of the nature of the business, the easiest way to implement distributed registry solutions is to accept payments in the most popular crypto currency in the world. Choose one of the many virtual wallets available on the market and offer your customers the opportunity to pay in Bitcoins. With one stone, you will improve the speed of all payment transactions,
and you are positioning yourself as an entrepreneur who keeps up with online business trends.

2. Feel the power of smart contracts

If we make a comparison between blockchain technology and an operating system, then smart contracts are the best programs that can run on that operating system. Contrary to traditional paper contracts, smart contracts are part of a code written in the Solidity language, which includes the terms and conditions necessary for a contract to come into force (eg the transfer of intellectual property rights, financial tools, etc.). Verification is automatic and is based on a generally available algorithm which automatically grants access to an asset or ‘subject’ of a contract when the terms of the contract are met. The business potential of this solution is enormous: through the use of smart contracts, we eliminate the need to involve intermediaries such as legal advisors or bankers while maintaining complete data security and transparency. In this way, Blobkchain enables you to create a competitive advantage by significantly reducing costs and accelerating operational processes.

3. Fund your unique business idea

ICO (Initial Coin Offering) is the granting of virtual shares (tokens) to a company in exchange for financial support for a new venture. ICOs are supposed to resemble a stockbroker or venture capitalist, but unlike the capital raising method, ICOs are not dictated by draconian regulatory requirements. From the beginning of 2017 to today, the total capital collected through ICOs was $ 1.6 billion, and one of the largest single ICO in Q3 was the made by the startup, Tezos, which collected a total of $230 million. Despite the controversy which was sparked by ICOs among conservative market analysts and finance experts, for new entrepreneurs who have an innovative business idea, ICOs may be an interesting option to raise funds for the company's expansion.

4. Share & Care - Build communities beyond divisions

Blockchain can be used as a loyalty program platform, where points can be used to generate tokens or virtual currency. By using publicly distributed registries, users will be able to benefit from having multiple service providers using the same database. In addition, with solutions available on platforms such as the Ethereum Project, companies can give their investors a voice: instead of convening in a board meeting, easily vote on a business idea and get feedback via blockchain. The whole process can be nearly 100% automated by verifying smart contracts through a properly programmed bot.

5. Use ready-made solutions

There is no longer any need to study computer science to benefit from the use of blockchain. With the help of open source platforms such as the Ethereum Project , you can set up a virtual wallet, start financing your business or generate tokens. Even though Java and Solidity skills are essential to optimize and tailor these tools to specific needs, the source code is available for anyone within a few clicks.

Blockchain is a revolutionary technology that will only grow in popularity over time. Today's solutions seem to be perfectly tailored to the needs of fintech startups. Combining an innovative technology, a balanced business model and a unique value proposition for the customer is the Holy Grail, which is sought by business experts all over the world. Take the risk and join this elite group, as the stakes are getting bigger: it is estimated that the global blockchain market ($ 210 million in 2016) will reach $2.3 billion by 2021 .

Sources:
https://www.pwc.com/gx/en/industries/financial-services/assets/pwc-global-fintech-report-2017.pdf
https://ethereum.org/
http://www.marketsandmarkets.com/PressReleases/blockchain-technology.asp