It was almost a ‘futuristic’ day when key banking industry personnel met with 3W Consulting Advisory to discuss blockchain, crypto currency and bitcoin world. The session was hosted by Champike Munasinghe who is a 3W Advisory Consultant who has 22 years of experience in the ICT field. He is a pioneering technologist, investor, serial Entrepreneur, and currently a Director/CEO – Bitcoin Pvt. Ltd (Sri Lanka) which conducts extensive research into development, mining and trading of Crypto currencies, Structuring of ICO models, blockchain applications and trading of mainly, bitcoin, Litecoin, Ripple and Ethereum.
A thought-provoking session proceeded with presentations by Champike and discussions with the audience that consisted of key corporates including HSBC, Standard Charted Bank, John Keells, Citibank OpenArc, TBWA and A3 Team (Pvt) Ltd and a few independent consultants. Topics included the basics of blockchain, crypto currency, bitcoins, the how and where it all started, the process of Mining, Trading, authenticating bitcoins, blockchains and wallets, to more complex topics such as its effect on Anti Money Laundering efforts, the technical and political vision of the bitcoin world, transparency and security of transactions and modifications and change abilities inside the blockchains. Questions were raised on how bitcoin owners crystalize their earnings.
Blockchain is the technology (platform or system), and bitcoin is the first and most proven application of blockchain technology. The blockchain is a sequence of data arranged in chronological order; each block data points to the previous block and is called a “Hash” which carries a time stamp and date with the transaction values and owner details.
Bitcoins came about due to the need for currency that’s independent from control of local central banks/controlled authorities and that can be moved across borders and people and its technical vision is to be distributed, open, public and extremely secure. It was noted that there will only be 21 million bitcoins created, thereby creating a ‘market’ for itself by being scarce and limited; similar to gold. A bitcoin (BTC) is divisible to the 8th decimal place, so each BTC can be split into 100,000,000 units. Each unit of bitcoin, or 0.00000001 bitcoin, is called a satoshi (which is the smallest unit of a bitcoin).
When questions were raised by the audience on the ownership of the blockchain, it was mentioned that there was no one person or company who owns the chain. Anyone who is mining or taking part as a full Node is the collective owner/s. Currently there are 30-40 million miners involved. The only way to take over the blockchain system is a 51% attack which is impossible by design and even with overcoming design restrictions by the sheer size of the network itself. The Ledger is a public record and miners carry all the ledgers which can be downloaded to your computer as a Full Node. It is however resistant to any modifications. Minimum of 3 miners have to confirm a transaction to be verified in the Ledger. This increases with time by confirmations from other miners and due to this constant confirmation and authentication of the Ledger, it can never be retrospectively changed.
Coming back to day-to-day life and transacting with bitcoins, the bitcoins are in use in international markets. Major companies are using bitcoins for their day-to-day transactions with Bitcoin debit/credit. For example, Microsoft offers bitcoin account transactions, and Dell, Reddit, Expedia and PayPal also transacts with bitcoins via their subsidiary Braintree.
The nature of bitcoins being public and unchangeable, allows for opportunities for providing transparent transactions breaking through such barriers and possibly reducing money laundering. It is clear that the process must be regulated especially in economies and markets that are unstable. However, countries that over-regulate a disruptive innovation in its infancy will only lose out on the first waves of that innovation. Several countries seem to be heading that way, and the US is now in the front seat of that movement.
It was also discussed the emerging trend of fund raising via Initial Coin Offerings (ICO) where close to US$10 Billion has been raised over a period of just 4 years. The potential of Sri Lankan companies with an internationally appealing value proposition can easily tap into this vast market to raise funds in the form of an ICO. The case of a Bitcoin (Pvt) Ltd. Client who raised US$100 Million within 30 days for a brand new project to develop a specialized crypto currency Mining solution was looked at as an example case.
It is eminent that the bitcoin world will change the way for not only bankers in future by taking away a piece of the pie in the banking system, but also by changing the way people transact online. According to the recent Fortune magazine article, the reason why bankers are afraid of bitcoin’s impact is due to bitcoins leading to ripples across the financial sector, where it will create new winners and losers, and will likely decentralize banking services and create micro markets to an extent not seen since the advances of the barter economy and the market economy combined. There is an internet of Value created. Once each potential good has a financially tradable and storable equivalent, “a bitcoin,” trade will explode in a myriad of directions impossible to predict by current algorithms. Intermediaries will come and go, and the end points of exchange nodes will become more important. To many bankers, this is a scary thought. To everyone else it is likely to be quite liberating. We found this interesting video on ‘Why banks fear bitcoins’:
Click on the image to watch the video or click here.
Bitcoin is said to be not merely a new market, but a market of markets; a platform for all kinds of new markets to emerge. Some say that ignoring bitcoin is similar to ignoring the reality of globalization. In the case of bitcoin, what is being enabled here is not merely a new market, but a market and the promise of a transformation greater than the Internet. For banks the waters still seems murky but is expected to provide a huge opportunity for innovation and getting on board early to take advantage of a landscape that is surely but changing in the future.
– Dulmi Gunatilake – Head of Business Development & Marketing, 3W Consulting
Partner With Us:
Contact 3W Consulting about
• Partnering with 3W Advisory for a consultation for your organization on adapting blockchain, crypto currency in to your organization, transact or sell with bitcoins or to
• Explore the possibility of an ICO to raise funds for your organization or to
• host a keynote knowledge sharing session for your company
Email us here and send us your request>