While revolutionary for mobile finance, blockchain — the underpinning of bitcoin — is still in its early days, and experts say it will need to change and go through an evolutionary maturation process before the full effects can be realized by the larger world.
Blockchain, put simply, is a decentralized, secure way of authorizing transactions online. For now, it’s a technology that allows value to be exchanged between two different parties, but the future of blockchain will likely become more specialized, advanced, and tailored to individual needs.
Consider the automobile, which only became affordable to middle class Americans after Henry Ford revolutionized the world with the Model T. In the early 1900s, the Model T was essentially the one model available for all use cases.
To Ryan Zagone, blockchain and its roots in bitcoin was in many ways the Model T of online transactions. Zagone, who is director of regulatory regulations at real-time cross-border payment company Ripple, spoke with One World Identity’s Cameron D’Ambrosi on the latest State of Identity podcast to talk about blockchain’s humble beginnings, and where it could go next.
“Over time, we needed to specialize the design of the car to meet the particular use case,” he said. “So today we have a sports car to go fast, a minivan to move the family, an 18-wheeler to move cargo. Each of those designs is very specific to the use — they have the right design, they have the the right safety measures, the right risk mitigates for the use case.”
As blockchain and mobile payments continue to evolve, innovators along the way will push forward, just as Henry Ford’s successors took the reins and attempted to revolutionize the automobile (with varying degrees of success).
How, exactly, blockchain will evolve is impossible to say, but Juan Llanos, a blockchain and fintech executive and advisor, sees three key areas where the success of adoption will be crucial.
The first step, in his view, is awareness and education — bringing people’s attention to the revolutionary technology.
Once blockchain awareness and understanding are better achieved, the financial industry can work on building bridges with existing authorities and establishment, such as regulatory agencies and legal frameworks. Blockchain advocates will need to “create a community that is trustworthy and has sound governance mechanisms,” Llanos said.
Finally, he said the technology behind blockchain will need to be improved and proven to be as robust and secure as is necessary, guaranteeing integrity and quality. Along those same lines, there will need to be new standards developed that can be trusted as the “new way” of operating with online transactions.
In other words, it won’t be easy for fledgling technology to mature.
“This is a process that is going to take time,” Llanos said.