Guy Halford-Thompson moved on the crypto scene early, with his 2013 company QuickBitcoin. Now, he’s commercializing blockchain across industries with Blockchain Technology Limited. After successful projects with industry giants such as BP and Visa, BTL is ready to scale. We asked him about the future of blockchain, and what it would take to truly commercialize blockchain. To learn more, join Guy and other fintech leaders at Mobey Day in Toronto, August 30–31, 2017.
Carta Worldwide: How is blockchain disrupting payments?
Guy Halford-Thompson: The security, speed, and cost incentives are drawing both startups and incumbents to blockchain technology. It has the potential to become an enormous industry and especially this year we are seeing adoption happen quickly in order to maintain or grow market share. From the consumer’s perspective, they may not even know they are using the blockchain as their bank begins implementation. Others, often more ideologically motivated individuals or technologists, have begun using cryptocurrencies to facilitate peer-to-peer payments.
It is difficult to tell how the payments sector will play out between startups and incumbents. That is, it is hard to tell if a large portion of the population will transact with cryptocurrencies for everyday purchases, or if they will continue to use traditional electronic methods with the blockchain underlying their bank’s infrastructure. Overall, this innovation should be good for consumers and business as it will push transaction costs down and decrease settlement time.
As for the functional advantages, people are able to send payments internationally in a few seconds or minutes, as opposed to days. The costs are far lower and do not require a third party to facilitate the transaction, with blockchain protocols serving as trust, security, and verification mechanisms.
Carta: What are the trends in blockchain and payments?
Guy: Trends have expanded outside of the financial sector in the past one or two years. Finance was always a clear and obvious application, and continues to receive a lot of investment and attention, but companies have expanded to applications such as decentralized data storage, personal identity verification, and decentralized internet, among many others. And in the case of BTL more specifically, we’re working with the energy sector as well as finance.
We have successfully completed a European-wide interbank settlement pilot with VISA and six of their bank clients, which demonstrated the potential of blockchain technology and our Interbit platform. Payments is a huge area and the work we have been undertaking in the energy space has shown how payments across other industries can be streamlined by blockchain technology.
Carta: How will blockchain technology and decentralization begin to cross over into traditional banks?
Guy: Banks have been testing the technology for some time now and are already adopting it. They stand to benefit greatly from blockchains as they see the potential of greatly reducing the costs of money transfers, security, and third-party functions that could be automated by blockchain technology. In the short term, banks may become more efficient and customers are likely to stay with their banks because they will benefit from price decreases—and banks continue to provide other important services such as mortgages. While there are companies working on decentralizing functions such as peer-to-peer lending, it’s unclear exactly how or if traditional banks will change their practices in response.
Carta: What will it take to truly commercialize blockchain?
Guy: Blockchain technology has overcome several crucial technical hurdles in the last few years, but there are further technical challenges that will need to be addressed in order to scale. For example, the majority of blockchains are currently using large energy consumption, and may need to shift to a more efficient consensus mechanism. Additionally, the user experience can be greatly improved. All the barriers to entry need to be taken down so that an average person can easily use the technology for practical purposes; the current state remains a little clunky. I believe the economic incentives will push companies to adopt blockchain solutions and competition will accelerate this.
Carta: What role are ICOs playing in the ecosystem?
Guy: ICOs have been a huge topic this year. The amount of money being raised in brief time periods has surprised many people and forced traditional investors and news outlets to pay attention to a new way of raising money. The increased attention and investment has served as a catalyst to the blockchain industry. The attention ICOs have received has raised questions of regulation which is a topic in its own right. ICOs can provide great benefits to founding teams as they can raise money in new ways which open up new opportunities.
Join Guy Halford-Thompson and other fintech leaders in Toronto at Mobey Day 2017, on August 30–31. He’ll be speaking about blockchain along with speakers from SecureKey and Nets. Register online.