Blockchain decentralises the monetary authority, wrestles power away from traditional centralised systems, and gives profit back to the individual.
“In an analogy I like to coin, I will illustrate blockchain’s potential with an iceberg, a solid body of ice that floats on water. What you see is the top 30%. Underneath the cold waters is the remaining 70% which requires a deeper dive.”
Digital currencies like Bitcoin and Ethereum have become common household names in today’s economy. In simple terms, cryptocurrency is the digital currency that veers away from traditional notions of centralised monetary authorities. Instead, it relies on decentralised control. This is possible through the use of distributed ledgers, typically known as blockchain and cryptography for data encryption.
Despite existing controversies, cryptocurrency and blockchain have the potential to disrupt major industries by cutting out the middleman. It is remarkable what transparent, distributed ledgers can accomplish. Yet, we have barely scratched the surface. My prediction is that blockchain will hit the ground running in the next few years. It will have a heavy impact on our livelihoods. As you can probably infer, cryptocurrency and blockchain are essentially one and the same.
In an analogy I like to coin, I will illustrate blockchain’s potential with an iceberg, a solid body of ice that floats on water. What you see is the top 30%. Underneath the cold waters is the remaining 70% which requires a deeper dive.
In developed countries like Singapore, we get to experience the top 30% of the iceberg. Through blockchain technology, we can enjoy smooth borderless payments. We can build trustless ecosystems and make independent investments as we cut out the middleman. Decentralised applications would become the norm as we take control of our data through this new, transparent paradigm.
What we don’t see is the remaining 70% submerged under waters, the side of the blockchain iceberg that benefits those not as fortunate, from less developed nations. While we have the luxury of having relatively better governance here in Singapore, the same cannot be said for others. Individuals from less developed countries do not enjoy the sort of financial stability that often accompanies good governance.
In fact, a whopping two billion world population have no access to financial institutions. Furthermore, blockchain can permanently record individuals’ personal data, identifying those without a proper identity, thus giving them legitimacy.
Blockchain technology tackles these issues by banking the unbanked through unorthodox means. Identification is the catalyst that enables institutional healthcare, education, human rights and many opportunities in life. In my opinion, financial inclusion is the key to reducing poverty, as it plays a vital role in wealth creation.
Though we have some time to go before these possibilities see fruition, blockchain not only adds value, it also creates value for those who were previously marginalised. I am confident that this reality is around the corner. In fact, my vision is that in three to five years’ time, Singapore will showcase a blockchain centric ecosystem. It decentralises the monetary authority, wrestles power away from traditional centralised systems, gives profit back to the individual, and I eagerly await that day.
Hong Qi Yu is Founder of TOKENIZE Exchange, the next generation digital currency platform that facilitates the trading of multiple cryptocurrencies. Based in Singapore, it exists to connect an autonomous community with a purpose – to bring financial democracy back to the people in an orderly ecosystem.