As the blockchain revolution takes the world by storm, many government agencies and private players want to know how the potential of blockchain can be best harnessed.
Trescon recently interviewed Mirza Ashraf Beg, blockchain expert, and speaker at World Blockchain Summit taking place on 24-25 October 2017 in Dubai, UAE. He gave his insights about the potential of blockchain’s disruptive impact in the industry. Ashraf is currently the Head of Treasury & Investment Ops and Islamic Operation, Commercial Bank of Dubai, UAE
What can be the driving factor for the adoption of blockchain in businesses?
Blockchain holds tremendous potential for many industries; it can transform everything from proof of creation to ownership, transfers of digital assets, rights management, micropayments and creative collaboration. It can eliminate or reduce the need for centralized registries of intellectual property. It can bring transparency to markets, tracking the sale of work and the payment of resale royalties.
Blockchain will revolutionize the role of bookkeeping and supply chain mechanism of every business, it will track, store, and will help in establishing trading smart contracts at every step of any business. Blockchain quickly and inexpensively provides trust in the identity and legitimacy of any partner in any financial or trading relationship. This reduces manufacturing cost and time to reconcile transactions. Blockchain can democratize information, protect civil rights and help solve global challenges.
What according to you are the top 10 industry sectors that blockchain is going to impact the most?
According to me the top 10 industry sectors that blockchain is going to impact the most are:
1. Payments and e-wallets, multi-industry level channels
2. Supply chain and consumer finance at multi-lateral industry level
3. Online insurance
4. Manufacturing Supply Chain
5. Peer-to-peer (P2P) lending platforms
6. Personal finance management
7. Online funds
8. Online brokerage
9. Trade Finance
10. Non-finance Services Sector i.e., Airlines, Pharmaceuticals, Arts, Reality etc.
What according to you are the top 5 challenges that organizations could face in blockchain technology implementation?
As per my view following are the 5 challenges that organizations could face in blockchain technology are:
1. Directors & Management Approval and Outdated ITC legacy
2. Budgeting and Targeted startup funding
3. Integrating with multi-layer industries
4. Regulatory association and delay in forming laws
Name some of the most important benefits of blockchain implementation for any organization?
Enhanced security through cryptography and a tamper-resistant design, while eliminating the risk of a single point of failure. If a breach does occur, its location can be determined and isolated, precisely and quickly without impacting the rest of the network.
1. Simplification and cost reduction, by removing the need for intermediaries and automating process elements through smart contracts. The shared infrastructure can help reduce costs within the business entity and with other parties across the value chain.
2. Transparency. With access to blockchain, authorities can see the specifics of transactions for themselves instead of relying on the veracity of business reporting.
3. Smart contracts stored in the blockchain track contract parties, terms, transfer of ownership, and delivery of goods or services without the need for legal intervention. Bills of ownership, titles, and notarized documents stored on the blockchain can also prevent forgery, fraudulent sales of merchandise, and illegal sourcing practices.
4. The Time Stamp: By utilizing a blockchain, companies within a supply chain gain transparency into who is performing what actions, when, and in which location, Once a supplier (or its products and shipping containers via internet-of-things sensors and chips) inputs tracking data onto a blockchain ledger, it is immutable. This allows other suppliers in the chain to track shipments, deliveries, and progress among other suppliers
This allows other suppliers in the chain to track shipments, deliveries, and progress among other suppliers, where no inherent trust exists. It also increases efficiency and lowers costs, as the need for middleman auditors is eliminated once individual suppliers can easily perform their own checks and balances in near real time.
Is it entirely possible that cryptocurrencies like ethereum and bitcoin might usher in a new age of paperless economy?
I have a different view on this pervasive notion, as Adams Smiths’ supply-demand can give some value to anything in the market but sovereign minted coins have many feathers which technology has yet to produce, economics still runs on countries.
Money cannot function as money, i.e., as a medium of exchange, unless it is backed by actual, unconsumed goods, and has intrinsic value.
“Cryptocurrencies” cannot function as money. “Given this definition, cryptocurrency, with few exceptions, is not functional money, yet,”
Real currencies are backed by the ‘full faith and credit’ of the countries that issue them – backing that Bitcoin lacks by design.
The dollar has intrinsic value because you need dollars to pay taxes in the United States “Gold has real value because it’s shiny and can be used for jewelry…., But what about Bitcoin?
If you ask Bitcoin believers why a bitcoin is worth anything at all, they will tell you about how amazing the technology is, and how it’s ‘programmable’ and how cryptography and pseudo-anonymity are so great. But none of these are very satisfying answers.”
If blockchain is truly here to stay what is your opinion about its future prospects?
Findings from the 2017 study show that FinTech firms have reached a tipping point, and are poised for mainstream adoption across our 20 markets. Building upon the strength of their core characteristics of focusing on the customer proposition and leveraging technology in novel ways, FinTech firms are gaining traction in the market.
In the process, they are blurring boundaries between financial products and lifestyle propositions, as well as defining new standards within financial services. FinTech firms share two core characteristics: a laser-like focus on the customer proposition and a willingness to apply technology in novel ways.
These are powerful differentiators in a marketplace where many product-focused incumbent financial services companies struggle to deliver the seamless and personalized user experiences that consumers increasingly expect.
Four key consumer themes emerged:
1. FinTech has achieved initial mass adoption in most markets
2. New services and new players are driving higher adoption
3. FinTech users prefer using digital channels and technologies to manage their lives
4. FinTech adoption will continue to gain momentum.
Tell us about your session at the ‘World Blockchain Summit’?
My session will be on applied science of this new technology, focusing mainly on banking and finance industry. Covering scope of challenges and adoption of disruptions posed by new fintech innovations.
Will blockchain technology enable the banking industry to truly becoming a ‘paperless’ industry?
Yes, blockchain technology has a 70-80% chance of potential in making the banking industry truly a ‘paperless’ industry.
What are your expectations from the summit and what possible key takeaways are you looking at?
My expectations are to meet experts and have a discussion on the scheduled subject and grasping their presentation and take most of them as a database for my future references.
Meeting vendors and startups and look for their strategies in future of disruption-based technology.
Building PR and look for an opportunity to how to adopt most of it in my bank.