What’s next for blockchain technology? | TECH(talk)

hi and welcome to Tech Talk where we
take a look at the latest in technology news and offer our insights and analysis
to see if we can figure out what’s going on I’m Ken Mingis executive editor at
computer world I’m here with computer world senior
reporter Lucas Mearian it’s time to check in on blockchain and see what’s been
going on lately so stick around okay so Lucas we’re back thank thanks
for being here um you know we’ve talked a lot about blockchain over the last
couple of years and it dawned on me that if 2017 was the year that blockchain
sorted to sort of emerge and you know the hype went crazy and then 2018 seemed
to be the year that it kind of really edged into supply chains you know ask
and Walmart and the Olive company and the diamond company and and so it seems
now that 2019 it’s really getting more of a foothold in the financial services
in FinTech area and so you know you’ve got the story about IBM’s announcement
this week so I thought we could start with that and then see where else
blockchain may be going this year so IBM this week what’s up what they’re doing
well they launched a worldwide which is a Global Payments Network based on
blockchain and stellar the Stellar’s blockchain financial network right and
it’s gonna be based mainly on a stable coin which just means that’s fiat
currency right backed by fiat currency basically so one cryptocurrency is equal
to one dollar in this case and it’ll allow for banks to cut out middlemen
banks and money transfer companies to cut out the middleman the bank central
banks and just make transfers between two entities on an open ledger so the
whole point here is to basically create this network that’s pegged to real
currencies rather than just strictly like crypto currency like Bitcoin for
instance doesn’t have any real currency behind it it’s valued at what everybody
seems to think it’s valued which is why it can fluctuate so much supply and
demand supply and demand so with something like this with stable coin
you’re looking at you know a real measure of value based on the US dollar
or whatever other I guess real currencies that
institutions want to use yeah probably makes regulators a lot less ENC they do
also have ripple cripple crypto currencies so they can do do play and
both feel that way but yeah but they they’re primarily it’s probably gonna be
played through a stable coin which is a lot easier to use
since regulatory oversight already covers that but there is a lot of gray
area as well especially since you’re talking about cross-border yeah and this
just rolled out this week let me ask you you know and and you may need to think
about this a minute but you know JPMorgan has also made some some news in
the last few months with its efforts around blockchain is this something that
this is obviously different than what JP Morgan is doing but are they kind of
related you know it feels like they are yeah they’re actually very similar the
only difference is is that IBM is creating its stable coin through a
partnership with another company a stronghold USB it’s out of Nevada
I think it’s honored about it okay and I’ll correct myself later that’s wrong
will it yeah and JP Morgan created its own stable point okay but they’re both
been gonna be used for payment networks and the whole point here is basically as
you say you know this is one of the advantages of distributed ledger
technology which is blockchain that you can eliminate the middleman eliminate
the you know all the the layers of I guess border cross border everything it
did basically smooths the movement of money and funds and currency between
either institutions or now with the with the IBM effort is that is that related
is that geared toward institutions or is it more toward individuals or some
combination thereof so probably the the greatest volume of
traffic over the network will be from payment authorizers and mark makers so
the Western unions of the world who are enabling foreign workers to transfer
their pay back to their home countries so they walk into a shop and they hand
the money – then electronically transfer back to their home
and that’s what they’d use this network for so they would take that money
convert it into this stable coin and then be able to transfer it over the
blockchain almost well that will be instantaneous then as soon as it’s on
the blockchain all the parties who are participating in the transaction will be
able to see it immediately but what’s I think it’s unique about this network is
it’s also a messaging platform so not only can you do these one-on-one for one
financial transactions but you also create a communications network between
banks and clearance the settlement is the idea there then that that because I
know one of the things you’ve written about is that this is near real-time
it’s not immediate but it’s five to ten seconds not five to ten SEC which is
pretty darn close you’ve been given the scale of what we’ve been talking about
and you know that’s been an issue with with blockchain in the past is the idea
that sure you can scale it up but then it gets slower and slower and slower as
you figure out as you’re adding you know blocks to the chain
so obviously IBM has something here that works in near-real-time I presume that
the financial institutions see that as a real plus yeah absolutely it creates it
removes the fee process from the central banks that are typically involved and a
lot of the regulatory oversight I don’t call stumbling blocks but maples hurdles
yeah the regulatory hurdle its friction its regulatory friction basically
exactly and it takes time and money to you know time is money in the financial
services industry so it reduces that IBM is conservative not conservatively
they’re saying probably about 50% of the cost can be removed through this okay so
it’s a saving for our financial now is this is this in place now is it
actually live they actually went live with that I think the first transaction
was March 8 March 8 okay and do we know do you have the number at hand of how
many institutions or entities are involved right now I mean I’ve written
will be more down the road yeah it’s a very low number right now it’s about six
that are involved I think four are actually using the network now and most
of these banks are relatively small entities and they’re not you know
they’re not a us-based however I did read a story
today that there are a couple of large US banks that are considering joining
the network although IBM did not disclose who they are okay they don’t
want to talk about it I guess until it’s uh until it’s nailed down it does seem
like though more and more as we get into this year that financial institutions
have gone beyond just taking a serious look at blockchain and now figuring out
how to work it and IBM is obviously willing to be a player in that because
you know it’s gonna be there’s a lot of money potential yeah I think there was
regulators and and others law enforcement were worried about crypto
currencies because they can be used for a lot of nefarious activities right
whereas a stable coin because it’s tied to fiat currency is less so you’re
guaranteed that you’re going to be paid because as a reserve of that money to
equal the amount of digital currency there’s real money behind it exactly you
can’t you can’t sort of artificially either inflate or deflate the value of
the coin or the cryptocurrency because it’s pegged to you know a solid currency
right and in these networks you’re verifying the people on the network to
begin with so the Western unions and on some other names but other companies
that make these wire transfers okay good alright so at least I know now what IBM
is up to and obviously this is something we’re gonna check back on because as
this gets into more financial services I’m sure there’ll be more banks in
institutions joining absolutely let me shift gears because you had mentioned
before we before we started taping that another entities getting involved with
blockchain and of course it’s gotta be Facebook yeah so what the what is gave
me a little sneak preview of what you’ve been looking at what why would Facebook
need a blockchain and for what purposes is it money is it some sort of it’s
money it’s again it’s all about money so Facebook would basically be challenging
other payment companies like Google pay Samsung something like venmo maybe I
don’t know they transfer between mobile devices things like that yeah it’s it’s
definitely mobile payments application that they’re looking at they would
probably also use a stable coin okay write their own stable coin or possibly
through a third-party and you’d be able to purchase things
say like advertisements get on facebook now through this stable coin through the
Facebook coin the advantage here is that you most Facebook users I think three
times as many Facebook users are using a mobile device to connect to Facebook and
then they are desktop device okay and people don’t really want to have to
punch in their credit card information they don’t feel as secure doing that on
a mobile device you know and it’s also kind of a pain and there’s no real way
to do it now so if facebook comes up with a payment method they can make
dollars off of this so is this a sort of thing where and I realized this is still
very sort of speculative and you know you know we’re still trying to nail down
all the stories but is the idea that you would hand over your credit card
information to Facebook they would have it keep it theoretically securely just
like all your other data but I’m serious it’s like okay but anyway um so you
would hand that to them and then if you want to do some sort of transaction
through Facebook right the information you know the the your credit card
financial information would be there and you would use the Facebook
cryptocurrency whatever it is which would be blockchain secure to make the
transaction yeah they’d have to get financial services institutions on board
to actually so probably supply the money they I mean they could do it themselves
they’re big enough obviously you know if they probably wouldn’t though so if I
get some financial services industry to back them on this but yeah basically
you’d have a crypto wallet with a stable coin and you could use that money or
even credit through them through a bank to make purchases on Facebook okay so
blockchain coming to a face book near you there yeah there are other things I
wrote down here that we’re interesting I talked to an analyst and the other thing
that this would allow people the Facebook to do is to fight fake news and
BOTS because using blockchain you can verify the identity of users now that’s
right now if there’s a little bit of an arduous process to do that on blockchain
but it could be simplified and therefore you would have to
verify who you are to participate I mean now you create a profile yeah on
Facebook so you just be creating a profile with verification information
who knows what that would be okay so that’s interesting so the idea here is
it’s not just financial that there may be a way of actually establishing that
whatever content is being shared on Facebook is coming from legitimate
people rather than bots or I mean if people willing to sacrifice a little
more time to register on Facebook for that purpose and we know they’ve been
having a lot of problems lately with that sort of thing yeah fake news and
BOTS yeah it could be a venture for them okay do we do we know if the Facebook
coin has a name is it is it Zuckerberg they have Facebook has not commented on
quatloos perhaps hey I mean New York Times its mother October 2 said behind
the scenes this is happening but Facebook hasn’t commented on us so we
don’t really know much about it other than that okay well I definitely look
forward to hearing more about that that has given the number of pies at Facebook
has its fingers in I’m not surprised that they want to look at this because a
lot of big tech companies are really taking you know pawn chain seriously but
I guess the proofs in the pudding when it’s when it’s really rolled out yeah oh
I wrote down also about if there’s a Barclays analyst that came out today and
said the valuation of this could be as high as 19 billion this is the Facebook
part yeah the Facebook car Facebook when we think about the number of people
they’ve got on the network on their on their a social network and and the you
know the potential purchasing ability there it’d be I’ll be very curious to
see if you as you say a financial institution would tie in with them
yeah because that’s gonna you know that’s a sort of vetting you’d want to
see rather than just Facebook saying hey we’ve got a new cryptocurrency I would
imagine they would go that direction yeah you have to have some backing good
got it any other thoughts before I let you go no I think that’s pretty much
covers where we are forever we are now yep all right as you can see there’s a
lot going on with blockchain and we’ll be revisiting this definitely with the
Facebook part and also IBM and some of the other tech firms that are involved
so absolutely thanks for the update Lucas for now for a distributed ledger
technology that’s a wrap

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2 thoughts on “What’s next for blockchain technology? | TECH(talk)

  1. I know Facebook is investing in block chain, but for commerce, why wouldn't a company like Amazon do this rather than Facebook?

  2. "Hedera Hashgraph" is not a blockchain but does the same thing in a bigger way. It is way Faster, more secure, stable and way less expensive to use. No waste making it superior. It is a virtual voting protocol that will not fork. This makes it very stable, makes it desirable for unlimited uses.

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