Eiland Glover:\u00a0\u201dRepresenting both a threat and an opportunity for traditional industries, cryptocurrency and blockchain have the power to both dramatically increase efficiency in current business processes and render entire industries \u2014 and maybe some governments \u2014 obsolete. Large corporations must therefore get into the blockchain game not just to try and stay ahead of the curve, but to ensure their survival.\u201d<\/p>\n
Ryan Taylor:\u00a0\u201dPublicly, we\u2019ve seen many financial institutions delve into the blockchain space. However, many businesses outside of the finance industry are seeking ways to adopt blockchain into their business model whether that be supply chain or record retention. I believe that these groups are turning to blockchain because it\u2019s cost effective, streamlined, and they would like to eventually eliminate unnecessary third-parties.\u201d<\/p>\n
Eiland Glover:\u00a0\u201dStable cryptocurrencies like the kUSD stablecoin we\u2019re developing at Kowala operate on fast, cheap blockchains that will soon make all payments \u2014 remittances included \u2014 instantaneous, secure, and practically free. The harder part for the next year or two will be the \u201clast mile\u201d problem \u2014 getting your crypto back into fiat currency when you need to. That\u2019s the point at which you must connect back into legacy money systems, and these will likely remain stubbornly resistant to crypto for a little while longer until they finally fade into history. Smart credit card networks and other entrenched payment companies will serve themselves well by investing early and copiously in new blockchain technologies.\u201d<\/p>\n
Ryan Taylor:\u00a0\u201dCryptocurrencies can dramatically lower the costs and increase the speed of payments and remittances. Unlike many other cryptocurrencies, Dash is purpose-designed for payments and remittances. For example, our InstantSend technology enables payments to transmit anywhere and anytime for micro fees. Currently there are hundreds of physical stores and over 500 websites that accept Dash, and hundreds of thousands of other merchants that accept it through Dash-enabled debit cards. The key for merchants accepting Dash as a payment method in comparison to bitcoin for example, is that our transactions lock within a couple of seconds, making Dash purchases feasible at the register and improving the user experience. It\u2019s also enticing for vendors and suppliers in other industries because Dash integration can completely eliminate cash-handling costs.\u201d<\/p>\n
Eiland Glover:\u00a0\u201dThe volatility of cryptocurrencies like Bitcoin and Ether make them unusable as an everyday means of payment for consumers and businesses. Stable cryptocurrencies like the kUSD stablecoin we\u2019re developing at Kowala will soon solve this problem, however, opening up cryptocurrency use for the 99% of the economy cryptocurrency doesn\u2019t yet reach.<\/p>\n
So we have no consumers to speak of using crypto, and the regulatory issues are still murky in most jurisdictions \u2014 it should therefore come as no surprise that merchants haven\u2019t begun to adopt cryptocurrency en masse? As more and more consumers obtain and use cryptocurrencies, the merchants will surely follow.\u201d<\/p>\n
Ryan Taylor:\u00a0\u201dThere\u2019s a couple of major challenges to mainstream adoption of blockchain technology and cryptocurrencies. Chief among them is the current user experience, which constitutes a significant barrier to entry for average users. As an industry we\u2019ve streamlined the experience of acquiring and using cryptocurrencies since 2009, but it is still a fairly daunting task for most individuals who aren\u2019t already in the know, especially when compared to \u201cone-click\u201d functionality of several payments platforms currently.<\/p>\n
The other key issue is that scalability needs to be addressed at an industry-wide scale. But for all the focus on scalability as a key priority, there\u2019s been almost no academic research performed on the topic. That\u2019s not to say that industry players, ourselves included, aren\u2019t trying to solve the challenge; but I think there is some underestimation, broadly speaking, of how much research is needed to overcome the scalability challenges facing blockchain technology.\u201d<\/p>\n
Eiland Glover:\u00a0\u201dBoth the user experience and scalability problems are relatively simple to overcome. The industry\u2019s maturation over the last year has been rapid, and we\u2019re already seeing the rise of accessible wallets and exchanges with more fiat pairings and simpler user interfaces. With regards to scalability, we\u2019re already witnessing a technological and ideological shift towards innovative Proof-of-Stake consensus mechanisms that promise the transaction speeds necessary for adoption.<\/p>\n
The real challenge is making the leap from a small group of speculation-loving crypto enthusiasts to regular crypto virgins who don\u2019t care at all about blockchain, but rather adopt crypto because it\u2019s a better product that contributes to their lives. Stablecoins like kUSD can open up participation to the general population, but we\u2019ll still need a way to prime the pump and trigger mass adoption. At our company, we\u2019re working on tools that make using crypto safe and easy, but we\u2019re also cognizant of the need to make adoption compelling and even fun. The industry hasn\u2019t crossed the chasm yet.\u201d<\/p>\n
Ryan Taylor:\u00a0\u201dPayments behavior is very slow to change\u2026 almost generationally slow when you look at the adoption of other innovations like credit cards or checks. When you speak with consumers in the younger age groups, they are much more open to digital currencies. However, there is usually a tipping point that is eventually reached that accelerates the process and draws in older generations. It will take time, but the potential of digital currencies will likely lead to a rapid rate of adoption in comparison to other payment technologies of the past.\u201d<\/p>\n
Eiland Glover:\u00a0\u201dAt face value, a successful implementation of blockchain technology means that companies should be able to avoid central points of failure, and keep their networks running at all times. Obviously, the comparative efficiency of closed versus open blockchain networks, especially on a case-by-case basis, remain to be seen.\u201d<\/p>\n
Ryan Taylor:\u00a0\u201dThe Visa outage was a key example of how the world\u2019s payment networks are incredibly centralized, with a relatively small number of entities controlling most of the money flow. The centralized nature of payment networks opens them up to security concerns, as bad actors can easily shut down the whole system by hacking into a single access point. Blockchain, however, offers a decentralized structure that is run by a vast network of participants. With such a structure, there are no single points of failure in the network. In addition, the computer code running the network is open source, which helps ensure the security of the network by making it less likely vulnerabilities remain unidentified.<\/p>\n
Eiland Glover:\u00a0\u201dSmart contracts will definitely offer legacy financial companies the ability to run more of their functionalities using blockchain, but as long as computation fees are priced and paid with volatiles cryptocurrencies, this option will remain unattractive. Companies need an element of predictability when it comes to their costs, and the rise of so called \u201cstablecoins\u201d with smart contract functionality and DApp programmability are already set to offer a solution. I imagine adoption isn\u2019t too far off.\u201d<\/p>\n
Ryan Taylor:\u00a0\u201dWhile blockchain technology is powerful, it is not ideal for literally all use cases. In addition, replacing legacy systems that function perfectly well today may not offer positive returns. For those reasons, I\u2019m personally sceptical that entire companies \u2013 especially existing legacy entities \u2013 will make a full transition to blockchain anytime soon.\u201d<\/p>\n
Eiland Glover:\u00a0\u201dWhile full adoption across all industry verticals is a ways away and certainly something that the space will have to push for, it is clearly on the horizon. This technology is simply too great to pass up, and companies that don\u2019t adopt will fall behind in a way that will ultimately prove fatal.\u201d<\/p>\n
Ryan Taylor:\u00a0\u201dFor those use cases that make sense, it is going to take a long time and a lot of effort from the industry to make it happen. Being realistic, it may even take unfortunate events like hacks that could have been prevented by blockchain to spur a proactive adoption. As an example, it took events like the Target and Home Depot credit card hacks to finally spur the adoption of chip cards in the U.S., and that is literally a 20 year old technology.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"