#XBRL adaptation for reporting, monitoring and supervisory purposes is a broad topic that encompasses Central #Banks, Regulators, Stock exchanges, individual companies (both private and public). Main relationships that can benefit #from XBRL adaptation in the financial sector Central Banks can improve their favorable financing business to the banks, if theyRead More
Bank Innovation
In 2015 and #2016, a new breed of challengers have emerged – the digitally focused challengers, such as Atom, Fidor Bank, Monzo and Starling, are continuing to grow with a number of them seeing improvements in profitability.
Image by MaximP, via Shutterstock
According to KPMG, total profits for the challengers increased by £194 million against a drop of £5.6 billion for the UK’s Big Five: HSBC, Barclays Bank, Lloyds Bank, The Royal Bank of Scotland and the UK subsidiary of Santander.
These challengers are distinguishing themselves through transparency, superior data analytics, cheaper banking services and simpler business models that provide them a cost advantage.
#Challenger #banks shouldn&8217;t be confused with neo-banks. While neo-banks offer a mobile-first banking experience in partnership with a traditional bank, challenger banks aim at becoming fully-licensed banks, creating new data-driven banking experiences and pricing models.
Today, we take a look at the world&8217;s top ten neo-banks and challenger banks.
Atom Bank is a UK digital challenger bank founded in 2014 by Metro Bank co-founder Anthony Thomson. It received a full license from the Bank of England in June 2015 and launched in full after its regulatory authorization restrictions were lifted in April 2016.
Atom Bank aims at offering mobile personal banking and savings as well as business banking, loans, and mortgages. The startup has raised over US$ 166 million in venture capital from BBVA, Toscafund Asset Management, Anthemis Group, among others.
Founded in 2011 by Brett King, Moven is a neo-bank that partners with CBW Bank on its direct-to-consumer product. Moven provides a mobile first experience platform that connects a bank&8217;s products to the end consumer experience.
Moven&8217;s app comes with a debit card and contactless payment sticker. The app provides real time spending insights that aims at motivating customers to make smarter decisions and save more. The startup has raised over US$ 24 million in funding so far.
WeBank, the online banking affiliate of Chinese Internet giant Tencent Holdings Ltd., is China&8217;s first digital challenger bank launched in early 2015. Its name comes from WeChat, Tencent&8217;s popular instant messaging and social networking app.
WeBank was the first private bank to start operations under a pilot, after the banking regulator granted licenses to six similar institutions in 2014.
Earlier this year, WeBank raised over US$ 450 million in a funding round led by US private equity firm Warburg Pincus, a deal that valued the venture at more than US$ 5 billion, according to the Wall Street Journal.
Launched in June 2015, MYbank is Alibaba and its affiliate firm Ant Financial&8217;s response to Tencent&8217;s WeBank. Similarly, MYbank is a challenger bank that provides an entirely digital banking experience.
MYbank was released two years after Alibaba, China&8217;s e-commerce giant, rolled out a personal wealth fund called Yu&8217;e&8217;bao.
MYbank was the country&8217;s second digital player to receive a banking license.
Simple, initially known as BankSimple, is an American neo-bank founded in 2009 that has partnered with Compass Bank and The Bancorp Bank for banking services.
Simple provides FDIC-insured checking accounts and is part of the STAR network for surcharge-free access to around 55,000 ATMs.
Simple was acquired by BBVA in 2014 for US$ 117 million to accelerate the bank&8217;s “digital banking expansion.”
Founded in 2013, N26, formerly known as Number26, is a German digital challenger bank aimed at revolutionizing the traditional banking industry.
In July 2016, N26 received its German banking license and simultaneously announced the extension of its financial platform as well as the addition of the bank&8217;s first investment product.
The initial N26 Invest product for German customers is offered in cooperation with Frankfurt-based startup vaamo. Customers can use N26 Invest to put their money into portfolios right from the N26 app.
N26 has raised over US$ 50 million in funding so far.
Launched in Munich in 2009, Fidor Bank is a German digital-only challenger bank that develops banking services and solutions for the digital generation. Fidor Bank launched in the UK in September 2015 having applied for a UK banking license in January 2015.
Licensed in Germany, Fidor Bank serves over 120,000 account holders and some 350,000 registered community members.
In 2014, Fidor became one of the first banks to use the Ripple internet-based payment protocol.
The bank was acquired in July 2016 by France&8217;s second largest group for banking and finance, Groupe BPCE for an undisclosed amount.
Headquartered in London, Starling is a licensed mobile-only challenger bank founded by former Allied Irish Banks COO, Anne Boden in 2014.
In July 2016, Starling received its banking license from the Financial Conduct Authority.
Starling focuses on offering a limited selection of services, centering around current accounts. The app, which hasn&8217;t launched yet, will offer alerts for smarter money management and real-time monitoring.
The venture has raised US$ 70 million in funding so far.
Monzo Bank, formerly known as Mondo, was set up in 2015 by Tom Blomfield following his exit from rival challenger Starling.
Monzo is a challenger bank based in the UK that is known for setting the record for &8220;quickest crowdfunding campaign in history&8221; when it raised £1 million in 96 seconds via the Crowdcube investment platform.
Monzo was granted a full banking license &8220;with restrictions&8221; in August.
Founded in 2013, Tandem Bank is known for being the second challenger bank to be granted a banking license in the UK in December 2015.
The company plans to offer digital services including current accounts, credit cards, and loans via its mobile app and website.
Tandem Bank hasn&8217;t launched its app and yet, the company is reportedly valued at £65 million.
The post The World&8217;s Top 10 Neo- and Challenger Banks in 2016 appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
WIRED Magazine has recently published a list of Europe&8217;s 100 Hottest Startups 2016. The list consists various #startups in e-commerce, #finance, AI, App, Mobile, Recruitment, etc. from #hottest cities such as London, Paris, Stockholm, Amsterdam, Istanbul, Barcelona… Out of 100 startups, 13 startups in #Fintech and Finance have made the list.
Property Partner &8211; Property Crowdfunding & Investment
Property Partner combines residential real estate crowdfunding with a secondary exchange upon which investors can trade their holdings. The company allows anyone to invest in an individual property of their choice, with as little or as much they wish, so they can own a share, receive rental income and access capital growth. Property Partner is the trading name of London House Exchange Limited, a company that is authorised and regulated by the Financial Conduct Authority.
Osper &8211; The Prepaid Debit Card for Kids 8-18
The branchless bank offers debit cards for 8-to 18 years-olds. Children can manage spending with an accompanying smartphone app, and parents can use the app to monitor spending and transfer (or withhold) pocket money. Founded by Alick Varma in 2012, the company is backed by Horizons Ventures and an array of entrepreneurs, including Samir Desai of Funding Circle
Qapital introduces a fun, automated way of saving money for specific goals. The totally free iPhone app is designed to help anyone reach savings targets by setting goals and applying rules to automate the saving. Qapital uses “If This Then That” IFTTT triggers to create a gamified savings system for millennials. Rules can be as simple as rounding up to the nearest dollar on everyday expenses or as interesting as rewarding yourself if you do certain things
BUX &8211; Casual Stock Trading
BUX wants to make everyone a stock trader. Released in 2014, its app combines &8220;virtua-money trading and a community&8221;, according to CEO Nick Bortot. It allows potentials investors to practise with digital currency before they spend real-world fund, with alerts sent when prices start to rapidly drop. Bortot claims the app has 450,000 registered users and is available in the Netherlands, Germany, Austria and the UK. Further European expansion is planned for the 31 people team.
Moni &8211; Banking In Your Pocket
Founded by Basemotion mastermind Antti Pennanen, this fintech startup offer prepaid MasterCards so travellers can pay without charges, and a money-transfer app that allows interest-free loans between friends. Its profile soared in February #2016 when the Finnish immigration service announced it would use to make payments to some of Finland’s 50,000 refugees.
CrowdProcess is a scientific computing company that owns James, an R&D tool used by many #banks to manage risk. James helps risk officers in banks manage risk better, reduce default rates and improve origination practices, using advanced scientific computing capabilities, including machine learning and advanced optimization. The company, founded in 2011 by CEO Pedro Fonseca, Sam Hopkins, and works with hedge funds based in New York and London.
A marketing tool that provides predictive algorithms for online businesses, Insider launched in 2012 and has 90 employees in 5 countries. &8220;There are personalisation tools which allow online businesses to create special content for each users. However, there are manual and integration takes ages,&8221; says co-founder and CEO Hande Cilingir. Insider‘s tools segment audiences automatically, for a monthly fee.
AloTech &8211; A Cloud Company
For companies running a call center operation that are frustrated with the high cost, complexity and difficulty of the conventional systems, AloTech is the web based, pay-as-you-go solution running on Google, which is low cost, fast, easy, scalable and with complete enterprise functionality able to be setup anywhere in the world in 10 minutes.
Parasut &8211; Financial Management Software for SMEs
The bookkeeping cloud platform made our 2015 list and has since doubled its customer base to 2,500. &8220;We signed a partnership agreement with Akbank, one of the largest banks&8221;, says co-founder Sean Yu. &8220;We&8217;ll integrate our application directly to online banking to enable seamless syncing of transaction data, make payments for invoices and payroll in-app, provide invoice factoring, credit and loans and other products in-app.&8221;
iyzico &8211; Virtual POS Service
TPayment platform iyzico has grown significantly since 2014. In 2015, it raised $ 6.2 million and entered the $ 400 billion Iranian market. It has more than 29,000 registered merchants (up from 3,000 in 2014) and has seen a 50% increase in the average number of transactions year on year. &8220;I am aiming to get as many smart and driven people as possible together, who will help us to become the payment champion of the Orient,&8221; says Marketing Manager a da Enen.
FundBox – Fundbox: Overcome Cash Flow Gaps
Fundbox is a #technology company focusing on helping small business owners overcome occasional short-term cash flow gaps. Founded in 2013, the service uses big data analytics, engineering, and predictive modeling to help optimize cash flow for small businesses and freelancers with outstanding invoices. The company already raised $ 112.5 million from investors including Jeff Bezos and Ashton Kutcher.
By giving people the ability to exchange digital cash directly with one another Colu is creating a new way of thinking about money that encourages sustainable and equitable economic growth while supporting local businesses. Colu wants to digitalise ownership of real-world items &8211; from cars to concert tickets &8211; using the #blockchain. Founded in 2014, the company has raised $ 2.5 million in seed funding led by Aleph Venture Capital. It has partnered with Deloitte and is collaborating with Barbados-based startup to introduce a #Bitcoin-based &8220;Caribean dollar&8221;
Kantox: Currency and Risk Management Solutions
Kantox is a foreign exchange service provider, offering SMEs and mid-cap companies a comprehensive solution to their foreign exchange needs, based on transparency, efficiency and value. Their transactions reached $ 1 billion, broke the $ 3 billion barrier in April 2016. It completed an $ 11 million funding round from Partech Venture, IDinvest Partner and Cabiedes & Partners in May2015, and released new software this year which automates FX transactions and payments.
The post 13 Hottest Finance And Fintech Startups in Europe 2016 appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
#Bitcoin and #blockchain #technology has gotten a major boost in Switzerland as Richard Olsen, the co-founder of OANDA and a former CEO of the North American FX Brokerage, is looking to harness the power of the technology to disrupt digital currencies and assets #trading.
Lykke, Olsen’s latest venture, has just released a mobile app for Android devices, which follows its iOS counterpart released in June. The #Lykke Wallet lets users trade digital currencies and assets, and come with a number of innovative features including instant settlement, direct ownership and zero commission.
Through the app, users can track asset prices in real time, check their balances, transaction history and blockchain details for all transactions, move assets to any bitcoin wallet, deposit and withdraw bitcoins via QR codes with no fees.
“Lykke Wallet, currently in beta, aims to prove the concepts and the technology behind the new global marketplace,” Olsen said in a media release.
Signing up to Lykke is quite simple: you can use your smartphone camera to take pictures of yourself and your identification documents.
Founded in Zurich in 2015, Lykke aims at cutting out intermediaries in financial markets by allowing participants to transact in a peer-to-peer manner.
It uses a technology called ‘colored coins;&8217; tokens that represent assets. &8220;If a colored coin is hacked, the issuer can cancel the colored coin and issue a new colored coin,&8221; explained Olsen in a recent interview with Finance Magnates.
Another interesting feature is the #platform&8217;s use of multisignature (multisig) wallets, which require two signatures (one from Lykke, one from the client) to spend funds from a particular wallet.
The Lykke Exchange itself doesn&8217;t take custody of client funds but also holds one of the two needed private keys. If, for some reason, the Lykke Exchange goes down, there is a &8220;refund mechanism&8221; for the private key held by the company.
&8220;We have solved the cyber security issue that plagues bitcoin exchanges and offer restitution, which is more efficient than a depositor insurance scheme in #banks that is limited to specified amount of money,&8221; Olsen said.
Lykke is building a global marketplace where users would be able to trade all classes of financial instruments issued in the form of colored coins in order to enable direct ownership and immediate settlement on the blockchain.
In May 2016, Lykke closed a second seed funding round, welcoming new investors Marco Brockhaus and Carlo Koelzer, founding partner of 360T&8217;s Group Executive Board and member of Deutsche Börse Group Management Committee.
That same #month, the company announced the addition of Nick Szabo, a Bitcoin pioneer, into its Advisory Board.
Lykke is currently on an Initial Coin Offering (ICO) which it plans to begin in September.
&8220;Blockchain is an opportunity for all businesses – literally all businesses can embrace the technology and seize the opportunities, such as issuance of new instruments, explosive growth of transaction volumes, new types of banking, investment management and insurance products – these markets have huge potential,&8221; Olsen said.
&8220;Companies that close their eyes to the new opportunities are at risk – they will be latecomers and will have to restructure, when revenues nosedive – a bad environment to embrace new business models.&8221;
The post Startup of the Month: Lykke, a Next-Gen Zero-Commission Trading Platform Powered by Blockchain appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
Payments : Part-1
Introduction – Mobile money as a network-operated platform for financial services is playing a huge role in many economies. Like in the past, the emergence of new services and infrastructure (bridges, railroads, electricity, telecommunications, internet, etc.) has had profound effects on human livelihoods. New ways of moving people, goods, reliable energy or access to information can lead to waves of innovation and have transformed markets as existing firms restructure and new firms emerge to capture available opportunities. For more details about my posts, subjects and relevance please read the disclaimer.
While it has often been described as a money transfer product, mobile money is a MNO service for storing and moving money by facilitating the exchange of cash and electronic value between various actors ranging from registered subscribers, businesses, the government and other financial service providers.
Let’s have an elaborate discussion on the Money Transfer System and the Mobile Payments Ecosystem.
Main Story – Apple (As per news 10 Million handsets sold in first 3 days) launching Apple Pay (NFC Solution) from a #technology prospective is neither a new offering nor a game changer. Without a doubt, this launch will set a trend for NBFTC (Non Banking Financial & Technology companies) on how to enter into payments and the so-called banking domain and eat the share. Unlike most of the MNOs which keep on focusing and growing the mobile network in positive way to penetrate this or can say isolated areas, millions of people are now able to connect via a mobile phone. As a result, mobile money has become a viable alternative to traditional bank accounts. The mobile payment relationship between the major #banks and Apple is, to put mildly, a delicate one..
If we compare the underlying hardware on handsets (like to like, apple to apple), the Nexus-4 which was released in November 2012 was exactly the same in terms of specification and most of us must have seen Facebook posts as “Welcome to 2012” and Japan’s FeliCa calls it “Welcome to 2004” as they did all (payment through NFC with fingerprints as signature, pulling money from credit cards and supported with wrist watch) that is claimed by Apple now in June 2004 for Japan and its still running very well even though this technology is still unavailable to most users. As a result, only tech-savvy early adopters have embraced NFC to date. Ultimately, the adoption of a de facto standard and the introduction of user-friendly NFC applications could enable the technology to cross the chasm to gain traction with the early majority and Apple trying to enable NFC-based Mobile Payments to Cross the Chasm.
On the contrary, moving away from the Americas and Japan, looking at Africa, according to ITU (International Telecommunications Union) news; 20% of the adult population in Africa does not have formal bank accounts making mobile money an effective alternative. Thanks to mobile money products, secure and reliable financial management options are now easily accessible. For example, governments – in sub-Saharan Africa especially – are using mobile money to pay pensions and grants.
Apple’s move has the potential to vastly increase mobile payment revenue, which would create a potentially highly lucrative market for banks. But the precise details of early negotiations have the potential to color the nature of those deals for years. As the smoke clears from round one, it appears that the banks chose to start by playing this game the Apple way.
The rise of mobile money – particularly in developing countries – is set to skyrocket but that doesn’t mean that traditional bank accounts will become obsolete. Rather, mobile money and formal bank accounts will work side by side (they have to if banks still need to survive) with many people making use of both simultaneously. While payment methods like cheques may become obsolete, traditional bank accounts will still serve a purpose. Bear in mind that mobile money products are actually owned and operated by banks, or affiliated to them in some way.
The New York Times has reported that Apple Pay could threaten some revenue streams for banks and CC-N (Credit Card Networks), as the technology giant looks to assume a more central role in the financial universe. The eager participation of banks and card companies suggests both Apple’s clout, and the recognition among financial institutions that they face broader challenges from upstart technology ventures, many of which are not as eager or willing as Apple to work with the incumbent financial industry.”
The article quoted James Anderson, the senior vice president for mobile product development at MasterCard, saying: “There are schemes that don’t respect and honour the payment networks. We want to invest in programs that respect our role in the ecosystem.”
The article further stated that banks are hopeful that they will make up for the lower rates by processing new types of transactions that are currently being done with cash or other payment methods. The big CC-N will not have to pay any costs for working with Apple. But some analysts warned this week that Apple Pay could, in the long run, push down the rates that both credit card networks and banks can charge merchants. Credit card fees are largely used to cover the costs of fraud, which are expected to go down with Apple’s fingerprint signature. (New York Times)
Rapid advancements in mobile technology are changing the way we live; from the way we connect with others to the way we manage our finances. Technological innovations have made certain aspects of our daily live that much easier. The advent of mobile money has awarded those who were previously unable to conduct monetary transactions an easy and affordable alternative to traditional bank accounts.
Prior to the emergence of mobile money, many people in developing countries were unable to open a bank account. Lack of infrastructure combined with minimal wages, meant that banking was out of reach for millions of people. The ‘unbanked’ were essentially stuck between a rock and a hard place. They needed money to travel to the bank, but without any way to receive their wages or subsidies from the government or employed family members; this was an impossible task.
Conclusion -: To conclude this article I pose the same question as always, where is the END and which is the way to go when it comes to Mobile payments is developing something existing to uncover the hidden gems already there is useful.
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Appetite for #blockchain #technology is growing worldwide as venture capital investment in #Bitcoin and blockchain startups exceeds US$ 1.1 billion and major financial institutions begin trialing the technology for varied applications.
Perceived as the trigger to “a profound technological shift” by authors Don and Alex Tapscott, blockchain technology not only promises to help #banks save up to US$ 20 billion in infrastructure costs but could also disrupt other industries as well including insurance, healthcare, education and governance.
While Silicon Valley reminds a hotspot for blockchain development, hosting 30% of the world’s bitcoin and blockchain startups and attracting 51% of the total venture capital investment globally, according to CoinDesk‘s Q1 2016 State of Blockchain report, other locations around the world are working towards building a strong domestic ecosystem.
In June, 24 members of the Swiss Parliament proposed a motion to reduce the regulatory burdens of blockchain startups. The motion, aimed at defining the term &8216;client deposit&8217; from banking bills, was rejected earlier this month, implying that FINMA, #Switzerland&8217;s financial watchdog, would consider blockchain and bitcoin startups as being qualify as banking businesses, according to a report by Startupticker.ch.
Switzerland is exploring other options including creating an entirely new license category for financial innovators carrying out some banking activities but with limited acceptance of client assets and no lending activity, as well as a license-exempt area, also referred to as a &8216;regulatory sandbox.&8217;
On January 01, 2016, FINMA revised its Anti-money Ordinance for businesses dealing with new payment methods and virtual currencies. Regarding virtual currencies, the authority equated them with money-transmitting services.
In recent years, the Swiss canton of Zug has welcomed a growing number of Bitcoin and blockchain startups settling and opening offices in the location. This has led to the emergence of the &8220;Crypto Valley&8221; nickname which today hosts the likes of Monetas, Shapeshift, Xapo and Blockchain Source.
Monetas is a software company focused on next-generation financial services, providing banks and firms with a platform that allows for safe, fast, and very low cost transfers of any asset. In October last year, the company announced a pilot for a nationwide transaction platform for Tunisia&8217;s postal services.
Shapeshift is a #cryptocurrency exchange platform that allows for instant trade.
Blockchain Source is a consulting firm specializing in blockchain #tech for the financial services industry.
Xapo provides users with a bitcoin wallet as well as a &8220;deep cold storage wallet.&8221; The company has raised US$ 40 million in funding so far. The company, initially based in Palo Alto, relocated its corporate headquarters to Switzerland in May 2015, citing the country&8217;s long history of neutrality and stability.
Alongside its vibrant startup community, Switzerland is also home to Nexussquared, a blockchain-focused incubator founded by former senior UBS banker Daniel Gasteiger and property specialist Daniel Grassinger that aims at &8220;establishing Switzerland as a nexus for blockchain technology.&8221;
In July, Nexussquared wrapped up the first edition of nexuslab, a virtual blockchain startup program co-organized with Startupbootcamp #Fintech.
PHOTO: Nexuslab Festival Finale by PIOTR PIWOWARSKI http://www.fotopi.ch, via Nexussquared
Eight startups presented during the nexuslab Festival finale in Zurich on July 07. These ventures included Agrello, an Ethereum-based platform for managing contracts and legal documents; Doqum.io, a peer-to-peer community system for digital documents; First Wallet, a payment system for content providers; and Taqanu Bank, a neo-bank that leverages blockchain technology to provide banking services to people who don&8217;t have a fixed address; among others.
The event gathered nearly 170 investors, industry experts and journalists. The presentations by the eight startups &8220;pointed to Switzerland&8217;s strong position as a blockchain hub,&8221; Nexussquared said in a media release.
&8220;From trading ownership in music as a form of alternative investment to a banking solution for refugees and creating and signing electronic contracts, festival attendees got a taste of how blockchain technology can be applied to develop tangible business models.&8221;
On September 13, the Finance 2.0 Crypto &8217;16 conference in Kunsthaus Zurich will welcome industry experts to discuss &8220;how cryptofinance will change the world.&8221;
Topics will include the use of blockchain technology in art and music, decentralized autonomous organizations, smart contracts, business applications for private and open chains, as well as international settlements using cryptocurrencies. Get an exclusive 25% Discount with Code &8220;FinTech&8221; .
Featured image: Chain and padlock by ifong, via Shutterstock.
The post Switzerland Opens up to Blockchain Tech appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
Despite the ongoing efforts of #banks to attract millennials, they are still failing to make an impression. According to Gallup, only 23% of millennials are actively engaged with their #bank, making millennials the least engaged generation. Considering that fully engaged customers bring considerable benefits and higher revenues – this is a big problem. IfRead More
Bank Innovation
The design of a high-profile project should give the public pause #about how #banks are seeking to apply #blockchain, ex-banker Frances Coppola argues.
CoinDesk
The design of a high-profile project should give the public pause #about how #banks are seeking to apply #blockchain, ex-banker Frances Coppola argues.
CoinDesk
Let’s get serious about this hyped #technology: the momentum is now
The buzz surrounding #Blockchain is comparable to that surrounding the #internet in the early 1990s
Do you remember the nineties? Everyone was talking about the internet and its potential, about life changing moments, about disruption, but no one could imagine what is possible? And today: our lives changed fundamentally. Everyone is communicating everywhere, new business models emerged – just to name the platform model, perfectly turned into revenue streams by AGFA &8211; Apple, Google, Facebook and Amazon. The company AGFA overslept this life changing moment: the Internet.
Some go even further to suggest that the Blockhain has the potential to reinvent key institutions. Ten years from now we will wonder how societies could have been survived without the Internet of #Value. But let’s step one step back: What’s Blockchain?
Blockchain is the technology behind the digital currency #Bitcoin, but Blockchain is unequal Bitcoin! The Blockchain is a kind of super sophisticated distributed ledger that keeps track of things on thousands or even millions of disparate computers, all coordinating with one another. Most simply, the Blockchain protocol is a cryptographically secure system of messaging and recording in a shared database.
Working in tandem, these systems enable a secure recording, verification and confirmation of transactions without the need of any single entity in charge. To write it in pictures: Today the Internet is an army with generals, we call them AGFA and the future?
The Blockchain is like the European idea &8211; each encoded and work for the good of the whole: for a common decentral network.
Using cryptography to maintain a peer-to-peer distributed, time-stamped and immutable consensus ledger of all past transactions. Each transaction is similar to a ledger item, which is aggregated with other blocks into a block of transactions, each connected to the last and needs to be agreed by consensus before adding to the chain. Transaction records cannot be forged, censored or reversed once a block is added. Transacting without trust and a third party becomes reality &8211; with three main disruptive advantages:
&8211; Trust: Less reliance on trusted third parties. Reducing or eliminating third party risk as trust is distributed over a decentral network
&8211; Immutable Record: All participants share and consensually update the record. This permanent record imparts confidence in the provenance of value being transacted and enhances fraud detection
&8211; Smart Contracts: Self-executing commitments. Obligations codified by smart contracts are easily replicable with the benefit of security, translucency and immutability of the Blockchain
As blockchain develops, instead of having an internet that puts information and content online, we will get a system that essentially automates trust and verification. Information we now rely on accountants, #banks, lawyers and governments to do. We will be able to know that anything on a Blockchain &8211; land rights, money, a deed &8211; is authentic and everyone around the world agrees on its value.
We saw over $ 1.4b in investments over the past three years &8211; just in the first quarter of 2016 VC firms invested globally $ 160m into Blockchain startups, up from $ 26 million compared to the previous quarter regarding CB Insights and KPMG. Three significant funding rounds on Blockchain Startups &8211; Circle with $ 60m (Series D), Digital Asset Holdings with $ 60m (Series A) and Blockstream with $ 55m (Series A) we have seen so far in 2016.
More than 2500+ Blockchain patents were globally filed over the last 3 years. 90+ central banks are engaged in Blockchain discussions worldwide as well as 90+ corporations have joined Blockchain consorts. Today, the pool of strategics investors in the Blockchain space has expanded from banks and VCs into insurance companies, payments and telcos.
Today use-cases are about Banking, or challenging the platform model, like Uber and AirBnB just to name a few. The Blockchain has the potential to eliminate intermediaries. Some other fascinating business concepts are about ownership and land rights or redefining the value chain of fair trade coffee. Software enabled contracts, called Smart Contracts, can verify if a job is made, and make the payment without a middleman.
Some InsurTech companies are even working to leverage Blockchain Technology as a mechanism for providing automatic payouts, particularly in the peer-to-peer insurance space where smart contracts could ensure payouts are made accurately and efficient. A song on the Blockchain could ask you to pay of it before it plays, cutting out Spotify and sending the money directly to the artist &8211; fair trade music! Disruption. Furthermore Digital Identity will be a critical enabler to broaden applications to new verticals for instance a digital system for storing and transferring identity.
Graphic: Blockchain Use-Cases (extract), by @jan_wich
Currently VCs are betting its money especially on Blockchain Startups that are focusing on middleware and services, payments/remittance and capital market solutions.
The global discussions worldwide are growing significantly, but significant hurdles remain to large-scale implementation. An uncertain and unharmonized regulatory environment, nascent collective standardization efforts as well as an absence of formal legal frameworks draw the current situation.
The technology has the potential to drive simplicity and efficiency through the establishment of new infrastructure and processes across financial services and data driven businesses. Blockchain is not a panacea, but has the potential to redefine current processes and call into question today’s business models.
Honestly to catch the real impact of the Blockchain Technology is difficult. But &8211; did we all know about TCP/IP and HTML once the internet had the breakthrough? No! Don’t struggle to understand the technology, search for the use-cases. Trial and Error. The Blockchain is more than a technology. It is a strategy.
Sources: Own research and ideas, WEF and CS
This article is first appeared on LinkedIn | Featured Image: Fotolia
The post BLOCKCHAIN &8211; The Internet of Value appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
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