Forget Bitcoin, Its Time We Started Paying Attention to Blockchain Technology and its Potential
Bitcoin has been in the headlines for all the wrong reasons this year – in the year-to-date period, its value has declined more than 46%. The general cryptocurrency market has been in a consistent downtrend this year – the market cap of the general cryptocurrency market is down 36% YTD. The hype about Bitcoin and cryptocurrencies continues to rise and fall as financial analysts try to understand its value proposition on finance and economics.
However, in the technology sector, we are more concerned about how blockchain technology could disrupt the world. Cryptocurrencies are interesting, but they are only one out of the hundreds of possible applications of blockchain technology. This piece looks at how blockchain technology is changing the world, one project at a time, with a review of the most recent blockchain pilot programs.
Blockchain-based remittance solution in southeast Asia
Last week, a consortium of south-east Asian banks revealed that they have successfully piloted a blockchain-powered cross-border transfer in real-time between Thailand and Singapore. Bank of Ayudhya in Thailand using its own blockchain, called the Krungsri Blockchain Ledger successfully remitted money from a domestic bank account in Thailand to a Standard Chartered account in Singapore.
The pilot program has the support of MUFG Bank, Standard Chartered Bank, and Mitsubishi Corporation. In the announcement, Thakorn Piyapan, Head of Krungsri Consumer Group and Head of Digital Banking and Innovation Division notes that the international remittance was “successfully completed in a matter of seconds, the technology-based transaction helps enhance their subsidiaries’ financial liquidity toward greater flexibility and efficiency.”
Blockchain startup helping people sell solar energy
Power Ledger is a small Australian Startup that wants to use blockchain technology to promote the shift to renewable energy, especially through solar power. The startup has piloted an app that people who have installed solar panels in their homes can install. With the app, you get to enter a marketplace for selling excess energy to people in your neighborhood and you get to set the price at which you want to sell the energy. Power Ledger believes that distributed energy is the future of energy because its removes power from the grasp of corporation and places it in the hands of consumers.
Interestingly, some stakeholders in the energy industry don’t agree that blockchain will fix the energy industry. For instance, Dylan McConnell, a Ph.D. researcher at the Australian-German Climate and Energy College observes that “Blockchain is basically a better way of managing settlement between different participants. And that is just not an issue in the electricity sector.”
Berkeley City Council to raise funds with blockchain
Earlier this month, Bloomberg reported that the city of Berkeley, California is starting a pilot program to apply blockchain technology to raise funds for the financing of community projects. In a unanimous vote, the city council agreed to commission the city manager to start a pilot program in which it will leverage blockchain technology to sell municipal bonds.
The city plans to launch “micro-bonds” for the issuance of low denomination bonds ranging from $10 to $25 instead of the traditional $5000 minimum that Wall Street sets on municipal bonds. Using blockchain to raise funds will make it easier for average citizens to invest in city projects and it would enable the city to find it much easier to raise funds without the encumbrance of financial gatekeepers on Wall Street.
U.S. President Donald Trump has hinted that the local university could lose its Federal funding as part of his efforts to pull funding from sanctuary cities. Hence, the city needs to take proactive steps to keep its finances afloat. In the words of vice mayor, Ben Barlett “we thought we’d get creative and figure out a way to finance our needs to take care of our people.”