In the very first hours of this brand-new year, MIT has added its voice to the roster of enthusiastic sources supporting the idea that blockchain is going to disrupt the financial world – in 2019.
Citing 2018 as a disappointing year for blockchain, Mike Orcutt writes about how the tide is finally starting to turn.
The article includes a number of key points. First, Orcutt points out that traditional Wall Street players are getting involved. There’s the “all in the family” connection between the New York Stock Exchange and Intercontinental Exchange (ICE), and then there’s news that Fidelity Investments, with its subsidiary Fidelity Digital Assets, is getting serious about taking traders closer to the cryptocurrency gates.
Orcutt also cites activity by leading retailers.
“Walmart has been testing a private blockchain system for years as a food supply tracker,” Orcutt writes. “It says it will start using the system next year and has instructed its suppliers of leafy greens to join by September.”
Then Orcutt also talks about how smart contracts are getting more sophisticated and applying to different types of legal and financial transactions.
“Smart contracts are bits of code that execute an agreement between two parties—for instance, a flight insurance policy that automatically pays out if your flight gets canceled,” Orcutt writes. “In principle, they would eliminate the need for all sorts of costly intermediaries. The idea has been around since the 1990s,… Now that technology is improving. “
It’s the third argument that’s perhaps the most interesting – as Orcutt talks about central bank cryptocurrencies, with the example of Venezuela’s Petro, he’s really setting up a use case that is wildly controversial.
“A digital form of banknotes guaranteed by governments?” Orcutt writes. “In many ways, it’s the opposite of the revolution the original cryptocurrency pioneers envisaged. But revolutions don’t always unfold the way the revolutionaries had in mind.”
Although you might say that central-bank-issued cryptocurrencies are a harbinger of what’s to come, others have been just as vociferously saying that many of these national cryptocurrencies are created to evade sanctions, or vulnerable to use by money launderers, and that bad-acting states will be the ones to adopt national coins.
Maybe the takeaway is that traders who can understand the nature of today’s central bank cryptocurrencies will be better positioned to understand where markets are going. Nevertheless, the MIT piece is in general one of the most prominent arguments that this year is going to be the year for blockchain proponents.
