Business leaders promoted the potential of blockchain technology and its ability to revolutionize the world at the second annual Blockchain Summit, hosted by the Chamber of Digital Commerce and the Georgetown Center for Financial Markets and Policy in the Lohrfink Auditorium on March 15 to 17.
The three-day event featured scholars, economists and policymakers, all of whom discussed the changes to our political and financial systems brought about by these new technologies, which enable secure data storage via peer-to-peer networks.
Blockchain technology was first implemented in developing bitcoin, a decentralized digital crypto-currency. Bitcoin cannot be owned or regulated by conventional financial institutions. Instead, every transaction is recorded in an individual block, with the larger blockchain serving as a general ledger.
Co-founder and president of Unocoin, India’s leading bitcoin trading company, Sunny Ray said the currency empowered people without access to bank accounts by eliminating transaction costs.
“We think that bitcoin could potentially bank the unbanked,” Ray said.
Ray said his company can assist individuals working abroad in sending money home to their family and relatives.
Ray equated the relationship between bitcoin and finance to that of email and the post office. According to Ray, bitcoin is revolutionary in the sense that it is redefining the concept of money.
“The fact that bitcoin gets us to ask the question ‘what is money?’ I think is very, very exciting,” Ray said. “Bitcoin and the creators of bitcoin looked at money and said ‘how do we rebuild it from the ground up?’”
According to Founder and managing partner of distributed database company R3 David Rutter, bitcoin’s potential could not be achieved if the decentralized blockchains or distributive ledgers remained isolated.
“In order to achieve the real promise of this technology, you can’t use a blockchain or distributive ledgers in isolation, so you need the network,” Rutter said.
Rutter said blockchain’s impact on banking could be similar to the internet’s impact on media.
“Not bitcoin, but the technology inspired by bitcoin, the idea of being able to push immutable records of transactions into the cloud—you know that idea could be to banking what the internet was to the media,” Rutter said.
R3 recently came under criticism after the leak of a PowerPoint slide alleged that R3 was shifting away from its original blockchain technology agent.
In response to this recent news, Rutter said the original blockchain approach was never part of the company’s plans because it was unnecessary.
“It was never in the design, it’s not something that is necessary. It is much more efficient to not have blocks,” Rutter said.
According to Rutter, what is more important are the people, particularly regulating agencies, who were previously unaware of bitcoin’s function and are now realizing the importance of having immutable records.
“It’s been great to see how the regulators’ view of this has changed from a couple years ago, with the fear and concerns about bitcoin to a mutual appreciation,” Rutter said.
Jonathon Johnson, chairman of the board for the internet retailer overstock.com, analyzed the potential applications of blockchain technology beyond commerce. Overstock.com, Inc. is the first billion-dollar retailer to use bitcoin as a payment method. It implemented a trading platform last December where settlements between parties involved in a transaction are brokered by blockchains.
The company seeks to use this platform to foster and advance the application of blockchain technology in banking, land titling, capital markets, identity verification and voting.
In reflecting on these endeavors, Johnson said society is too slow in adapting to the quickly changing technological landscape, which that will be blockchain’s biggest obstacle.
“Technology is outpacing humans’ or society’s ability to change as quickly,” Johnson said. “The blockchain’s biggest hurdle will be society’s inability to keep up with it.”
In contrast to Rutter, Johnson expressed concerns over any attempts to regulate bitcoin. According to Johnson, government regulation would be inefficient and greatly hinder the tool’s potential.
“Do you think that there is any government regulator that practices agile principles in regulating?” Johnson said. “The biggest anchor on that boat is regulation.”
Johnson said while bitcoin is a fascinating tool, the blockchain mechanism that enables it is the most revolutionary aspect.
“As cool as bitcoin was, it was the underlying technology that was going to be revolutionary,” Johnson said. “It’s just the tip of the iceberg.”
Have a reaction to this article? Write a letter to the editor.