BLOCKCHAIN & DIGITAL CURRENCY
CASH & CARD TALK
SECURITY & COMPLIANCE
A. Lyle Elias
ATMIA Founding Director
Is the future of blockchain technology dependent on crypto currency? A. Lyle Elias, IPayments Forum Chairman.
I recently did a presentation for the Reserve Bank of India (RBI) on how blockchain technology does not necessarily need to be linked to the crypto currencies that gave the blockchains their genesis. As I have followed, first the bitcoin phenomenon along with the almost complete rejection of crypto currencies in general by the banking and payments industry, to the blockchain “a-ha” moment that has resulted in every major player in the FinTech space tripping over each other in the race to take over the blockchain universe! Along the way I realized that we are so conditioned to be “buzz-word” driven that we can sometimes completely miss the point of what problem does the technology solve, and what systemic threats can be anticipated in the future.
I raised a question in an article last year titled; Financial Inclusion; is Blockchain technology the solution? - IPayments News, August 31, 2015 - about how the solution for financial inclusion for the approximately 2.5 billion people around the world that do not have access to traditional banking services, and how those who can least afford it pay the most to obtain basic financial service, may be solved with blockchain technologies. In my soon to be published Zero Genesis Project whitepaper, I proposed to RBI that perhaps the solution, in a figure of speech, is right-under-our-noses. What many in the FinTech space are not seriously addressing is the use of blockchains in mission critical environments where “Black Swan Fat-Tails” are not taken into consideration.
The single biggest question and perhaps the single biggest flaw in the decentralized nature of crypto currency based blockchain schemas, is that they are by definition “decentralized” and therefore controlled by the very trading speculation and “coin mining incentives” basis for how it all works. Terminology like “encrypted tokenization” has different meanings with different use case applications. Therefore, centralized versus decentralized system comparisons are equally context based. In fact, the very idea of crypto currency systemically significant mission critical systems is on its face a ludicrous proposition, because a blockchain is only as good as its collective decentralized computing power. The cliché – “the inmates running the asylum” – comes to mind!
When we remove the trading speculation and the mining incentives issues that inevitably arise from crypto currency based blockchains, one can envision a fraud and chargeback free payments ecosystem that is Fast, Anonymous, Secure and Transparent (FAST). A FAST token non crypto currency based blockchain can be the solution for global financial inclusion by providing universal access to a universal payments ecosystem who’s cost is just the energy that is consumed by the blockchain nodes that literally could be imbedded in all smart devices, thus reducing the cost of transactions to a fraction of what they are today, enabling the “Internet-of-Things” (IoT), and the smart machine-to-machine (M2M) brave new world where we are headed.