Blockchain is a movement that many are still not aware of. The times are changing and customers, businesses, banks, and financial institutes are becoming increasingly aware of its potential and benefits.
According to Deltec Bank, “Eventually, this transparent and secure technology will be embedded in the backend of almost everything we do, in the same way, the internet has become totally and seamlessly embedded into our daily lives and how we do business.”
One of the chief reasons that Blockchain is becoming adopted on a more widespread basis, can be attributed to its low barrier to entry. To access the blockchain, all the end-user needs is a phone. In the digital world, we live in, smart devices and phones are in the hands of almost everyone.
Currently with the rise innovation and technology over the last decade or do, we are now able to share information with anyone connected to the internet, with the only exception being those in firewalled countries.
Let’s take a look below at how blockchain has led to advancements in the world of business in terms of availability to capital for startups and new business and creating not only new opportunities but a whole new movement.
Access to capital for start-ups
Over the past few years, blockchain has revolutionized access to capital for new ventures.
In 2017 alone, blockchain-based startups raised close to $4 billion through a process known as
an ‘ICO’, initial coin offering or a token generating event.
In this process, a blockchain startup issues its own digital currency or tokens and sells them to either private or public investors.
Tokens have value because the issuer requires that future customers pay for services rendered using these tokens. The types of services involved vary widely from:
- Medical data
- Storage space for data
- Peer to peer home sharing
- Advertising space
- Resources for computing
Given that the supply of tokens is fixed, this creates a demand for tokens that creates a priceable market.
These types of tokens are known as utility tokens There are other types of tokens, like security tokens, which can be used to represent equity shares.
Another type, called digital collectible tokens, are unique tokens that can represent scarce or collectible digital goods, such as collectible cards, in-game items, or other collectibles.
So why is there such a move for all kinds of businesses to get behind blockchains potential? Let us take a look below as to some of the benefits of using blockchain and why there is such a move towards its innovative technology.
Blockchain’s potential is mainly contained within 4 main areas.
- Transparency Anyone with access to the network can view a history of transactions in real-time. Potential impact: The money trail can be tracked and monitored more accurately in areas like aid distribution.
- Immutability Blockchains protect data from the possibility of being tampered with. One of its chief benefits is that no single entity or agent is able to change past data without alerting the network. The Immutability of this innovative new technology has benefits in protecting areas such as voter authentication and land title registrations.
- Reduced counterparty risk Blockchains allow anyone to send money to anyone without an expensive or the possibility of a corrupt intermediary.
- Smart contracts Blockchains smart contracts can positively influence the global moving of funds, along with other benefits. For instance, it can allow money to be sent across borders or into natural disaster zones at a much quicker rate. Banks can perform this function, but often add high administration costs and slow processing times into the system.
The words of Joseph Lubin, the co-founder of Ethereum, suitably sums up the current trend towards blockchain with these words…
“Blockchain is more than a market, it’s a movement”.
Disclaimer: The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.
About Deltec Bank
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management