Santander Bank is one of the several financial services firm that is trying to figure out how to use the blockchain in traditional banking. UBS on the other hand has already set up a blockchain research lab in London. Nasdaq is also experimenting with the technology. Most of these companies are looking at non-bitcoin use cases of blockchain as a technology concept. Recently I came across the first commercial blockchain concept based product that is not Bitcoin. A lot of people agree today that Blockchain as a concept is a great one but are not sure about the future of Bitcoin. So what are we talking about here?
To give an example of Blockchain concept we found out about a product called Gyft, an online platform for gift cards where you can buy, sell and redeem gift cards. It is a partnership between 44 year old Merchant Acquirer/Processor/Fintech firm First Data and blockchain infrastructure provider Chain to offer gift cards for SMBs using blockchain. The product will be rolled out soon and will become a solid example of blockchain based innovation that has nothing to do with Bitcoin. Why it makes sense?
Majority of the SMBs don't have gift card programs and therefore POS installed at SMBs don't accept them. It is costly to offer a gift card program and difficult to see the immediate benefits. Its basically postponed gratification for a retailer but large retailers understand it very well and have gift cards acceptance.
Here comes blockchain that would allow Gyft to offer a great gift card solution to SMB customers.
Some other use cases and initiatives based on blockchain
- Building up on colored coins, digital assets are assets whose ownership is recorded digitally. Bitcoins are of digital assets, but since the Blockchain is a decentralized asset registry, it can also be used to register ownership and transfer of any digital asset besides bitcoins. In this way, a digital bond could pay coupons and redeem the principal to the address holding the digital bond, without the need of custodians
- Smart property can be controlled via the Block Chain. E.g., A car whose ownership is represented by a digital asset in the Block Chain. The physical car is connected to the internet and can read the Block Chain. Therefore it can keep track of the status of the digital asset representing it. As the digital asset is transferred from one address to another, the physical car can see this status update in the Blockchain and take necessary actions, i.e. change its owner… It’s a way of Automating the Internet of Everything.
- Other use cases include remittances, trade finance, lending, Accounting ledgers to reduce corporate fraud, medical and corporate materials, IOT,
What is Blockchain?
- A blockchain is a public ledger of all Bitcoin transactions that have ever been executed.
- A block is the ‘current’ part of a blockchain which records some or all of the recent transactions, and once completed goes into the blockchain as permanent database. Each time a block gets completed, a new block is generated
- Blocks are linked to each other (like a chain) in proper linear, chronological order with every block containing a hash of the previous block
- To use conventional banking as an analogy, the blockchain is like a full history of banking transactions. Bitcoin transactions are entered chronologically in a blockchain just the way bank transactions are. Blocks, meanwhile, are like individual bank statements.
- The full copy of the blockchain has records of every Bitcoin transaction ever executed. It can thus provide insight about facts like how much value belonged a particular address at any point in the past.
Some developers have begun looking at the creation of other different Blockchains as they do not believe on depending on a single Blockchain. Parallel Blockchains and Side Chains allow for tradeoffs and improved scalability using alternative, completely independent Blockchains thus allowing for more innovation.
“Man cannot discover new oceans unless he has the courage to lose sight of the shore.” ― André Gide. I think its time to think beyond Bitcoin. Think Blockchain...