This is Charles Brett’s start-of-the-week Enterprise Times ‘blockchain catch-up’ Week 7. Necessarily it is idiosyncratic and selective.
It is not intended to be comprehensive but does seek to highlight ‘Quick Takes’ on specific developments as well interesting pieces to read, a listing of some (not all) announcements/press releases and pointers to upcoming events.
Quick Takes – Charles Brett’s Blockchain Catch-up Week 7
How blockchain could disrupt banking
In September 2017, JP Morgan Chase CEO Jamie Dimon derided Bitcoin: “It’s worse than tulip bulbs,” he said, referencing the 17th-century Dutch tulip market bubble. “It won’t end well. Someone is going to get killed.” Lloyd Blankfein, then head of Goldman Sachs, echoed that thought, saying: “Something that moves 20% [overnight] does not feel like a currency. It is a vehicle to perpetrate fraud.”
Despite the scepticism, the question of whether blockchain and decentralised ledger technology (DLT) will replace or revolutionise elements of the banking system remains unanswered. Do banks have much to be afraid of? As this online detailed discussion makes clear – they should be.
Quick Take: for example, facilitating payments is highly profitable for banks. They have little incentive to lower fees or the float/time to process cross border payments. Yet Bitcoin transactions now require c 10 minutes to settle (on average, although this can lengthen substantially to hours or even days in extreme cases). That is still not perfect. But it is far better than the average 3-day processing time for ordinary bank transfers.
Furthermore, as the discussion describes, blockchain technology allows for atomic transactions – in effect transactions which clear and settle as soon as a payment is made. Contrast this with current banking, which takes monies instantly from customer accounts but only clears and settles the related transaction to the receiver multiple days after the payment authorisation (thereby creating the ‘free’ float).
Though a long read, it is worth the time and effort. The 7 examples, and illustrations, are good. It demonstrates why traditional banking should be on edge in the long term.
LiquidApps and Bancor
LiquidApps, a decentralised development solutions provider, is collaborating with Bancor to connect their automated, decentralised exchange from its base on Ethereum to parachains on Polkadot. The bridge, which utilises DAPP Network technology, should enable Bancor to broaden liquidity pools to other chains, starting with the Polkadot ecosystem.
While liquidity on Ethereum has grown substantially, gas fees have forced both dApps and liquidity providers to seek out lower-cost blockchains. One example is Polkadot. As the parachains in Polkadot build new generations of DeFi applications, they need access to liquidity (from Ethereum) to maintain a competitive edge. Bancor, as an automated market maker, seeks to bridge networks, thereby ensuring liquidity is not siloed. The important element is that DAPP Network technology will power this endeavour.
Quick Take: underlying the cross-chain bridge between Ethereum and Polkadot is the DAPP Network universal bridging framework and lightweight EdgeDSP software. Together these create:
- a flow of tokens and data between blockchains
- the ability to perform cross-chain smart contract execution.
By using EdgeDSP, bridge operators can reduce their costs and maintenance requirements – by running their nodes from within a simple web browser. As Yudi Levi, CTO of Bancor put it: “Interoperability is crucial to the development of multi-chain DeFi, and we’re thrilled to extend Bancor’s liquidity network to Polkadot with LiquidApps.”
Cryptocurrency concerns vs regulations in Europe: a review
The cryptocurrency market is constantly evolving. There is a complex interaction between:
- increasing investor demand
- the caution of governments
- a diverse palette of regulations and concerns organised country by country.
Quick Take: this useful CoinShares web page examines the European crypto market, from early birds through pioneers to mining havens. Some 4% of European internet users own cryptocurrency, across 17 markets (per a 2019 report by GlobalWebIndex). It shows Switzerland as having the highest rate of crypto ownership in Europe. London has the highest concentration of crypto holders. The European markets with the most cryptocurrency holders tend to have wealthier, younger online populations. There is much to discover.
7 pieces to read – Charles Brett’s Blockchain Catch-up Week 7
Selected announcements/press releases – Charles Brett’s Blockchain Catch-up Week 7
- KPMG, BitGo, and Coin Metrics launch Coin Metrics’ FARUM for public blockchain networks (press release)
- Simetria receives ‘No-Action’ letter From Israel Securities Authority to launch Israel’s first digital securities offering platform (press release)
- Future FinTech and Xi’an Jiaotong University have worked together to establish Blockchain Finance Research Institute (press release)
- Bitfury completes planned transfer of Hut 8 shares (press release)
- RowanPay launches blockchain payments network (press release).