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Drawing an analogy between the development of Internet and blockchain has become a commonplace in all the debates and meetings about the digital economy. If blockchain is going to have an impact as enormous as the Internet did 20 years ago, what phase of development is it in? Has the “Google of blockchain” appeared yet, or are we still in the phase of Netscape, the search engine that was born at the end of 1994? These doubts could be expressed in a more technical fashion: When will blockchain become widespread, when will it be a daily reality?
According to Jon Matonis, director and founder of the Bitcoin Foundation, we first have to be clear about which blockchain we´re talking about. In the 1990s, he says, Internet already existed and so did companies’ private intranets, “that closed their environment to protect themselves from the Wild West.” Today, it must be clear that the development of blockchain is different in chains of public blocks and in private ones, in which we need the permission of the members to operate. Matonis participated, along with other experts, in the MoneyConf meeting in Madrid.
In the chains of public blocks, he explained, there are already generalized uses: bitcoin, the digital money which is technologically based on blockchain has become, he assured the audience, a habitual currency for adults and online betting.
“This is a very interesting indicator, because from that business, it could easily expand its use to others,” he said, citing the example of Paypal. “When Paypal starting trading on the stock market in 2002, that was when many people found out that 70% of its business volume came from adult entertainment and online betting.”
Matonis ventured to put a date on the widespread use of blockchain in the financial sector: 2020. Some large banks such as BBVA are already carrying out pilot programs, such as one for the transfer of money between Spain and Mexico in a matter of seconds.
Carlos Kuchkovshy, head of technology at BBVA’s New Digital Business unit, said at the recent Sharing Madrid event that for banking, blockchain “presents two great opportunities: on the one hand, improved efficiency, with lower costs and a better customer experience; and on the other, taking advantage of its disruptive aspect, as a source of new revenue. In this second sense, we are especially interested in everything related to the collaborative economy and to the world of the automobile.”
At the same event, Daniel Díez, a blockchain expert from the Everis consulting firm, pointed out that banking and energy are the sectors that are most proactive in seaching for new blockchain applications, while telecommunications operators and insurance companies have a more reactive attitude.
Clues about what´s to come
Apart from pilot programs such as the one BBVA has, there are more indications that the massive use of blockchain will become a reality in a relatively short time. In his MoneyConf speech, Matonis cited the generalization of applications that use blockchain without their users even being aware of it, such as Abra y Epiphyte. Both are devoted to crossborder financial transactions.
Other experts consulted were somewhat more somber about the financial application of blockchain. According to Huy Nguyen Trieu, “it takes years and years to apply something like that in the financial sector.”
Trieu, who is advisor to several international organizations and founded the fintech consultancy The Disruptive Group, believes that there is a risk of bypassing the real disruptive power of blockchain, turning it into just another technology.
It´s a matter of improving what already works, but blockchain can also make that which doesn´t work so well, work better - such as copyright protection, traceability of food and merchandise transport, or the market for self-generated electrical energy. The possibilities are enormous and the journey has just begun.