Blockchain Will Help Society

Technological breakthroughs like steam engines, electricity, computers, the Internet and smartphones have altered the trajectory of humankind — blockchain technology is one such seismic event.

Blockchain is an Internet notary service that updates transaction ledgers, making them immutable. The ledger can record ownership and transfer of any type of asset, claim, or obligation.

Assets are referred to as digital coins accessible through a wallet on a smartphone. Accessible through a wallet on a smartphone, users can buy, sell and transfer tokens. Transactions are real-time and do not involve middlemen; they are recorded on the blockchain and are universally visible.
A core feature of blockchain is the concurrent swap of digital coins. Parties receive their coins immediately; transactions are not one-sided and the exchange of coins cannot be reversed. The exchange of coins happens efficiently as though the parties are standing face-to-face, only better because transactions are executable across the globe.

In their wallets, users will have coins of fiat currencies. But of greater importance is that wallets will include other types of coins from property to commodities, company shares, bonds, insurance, loyalty points, solar energy, tree tokens that accrue carbon credit rights.

A huge diversity of coins will emerge, changing the landscape of monetisation of assets and exchange of value. The system is better than a traditional barter society as it helps monetise all assets.

Imagine a buyer using tree tokens in their wallet and exchanging them for Starbucks settlement coins, using them to receive a coffee! Everyone can choose what is best for their circumstances, democratising the landscape.

This system will be more efficient, because digital coins are exchanged in a second without the heavy lifting of physical goods. There are no minimum transaction sizes, small transactions are not penalised with large fees. A global marketplace for all asset classes and instruments will exist, levelling the playing field.

Exchange prices will be in natural equilibrium, and intervention, as is prevalent in today’s market, will become obsolete. Mobile phones will dominate, because of their ease of use and immediacy. On a smartphone our entire contact list is at our fingertips; there is no operator that stands in the way.

In today’s economy all payments are made in fiat currency, with in-built transaction costs to support inefficiency. Direct exchanges are not feasible.

This favours companies with big brand names that have large-scale operations. In an electronic barter society, an individual or small groups will compete with big companies at no loss of efficiency, triggering a wave of innovation and wealth creation.

Lykke is a Swiss company with a team of 80 people working in 20 countries; a new type of company, like a political movement that builds and operates a global marketplace. Our goal is total inclusion and no discrimination.

We are inspired by how we can build a company, replicating nature’s functions. In a human body, there are over 10 trillion cells. Each cell includes the full DNA set — all the information needed to run the body. The genius of nature is the redundancy of information stored in each cell, a fully decentralised system.

Inspired by this ubiquity, Lykke develops all software and knowledge open source and access. We crowd source at all levels of operations and invite people across the globe to contribute. There are no monopolies, and competition between cells is a substitute for top down management.

There has been a lot of buzz about crypto-currencies and tokens. The market capitalisation of all crypto-assets is approximately $100 billion. This is minuscule when compared to the $280 trillion in liquid financial assets.

Blockchain will become the notary of choice for these traditional financial assets, but there is something more exciting afoot. The many other assets that are highly illiquid today because of archaic practices; the property market is one example — will get included in this new system, thereby exponentially increasing liquidity, resulting in unimaginable transformation.

Lykke’s mission is to unlock these markets and assets and empower the person on the street to turn their dreams into reality, and create a world that is in balance with nature; a prerequisite for peace in society.

Disclaimer: The views expressed in the article above are those of the authors’ and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

[“Source-timesofindia”]