There is a running joke about vegans that is particularly apt for the blockchain age.
How do you know if someone is a vegan?
They’ll tell you.
Similarly, blockchain enthusiasts can’t stop talking about this revolutionary new technology.
With good reason. The blockchain is the latest and greatest technology with the ability to solve many of the problems posed by our all-in digital ethos that permeates our social, economic, and professional lives.
Although it’s just coming into vogue in the past 18 months, the blockchain is actually almost a decade old. It initially arrived as the accounting backbone of Bitcoin, the first and still most popular cryptocurrency.
Blockchain: A Brief History
Fatigued by the mainstream financial system in the wake of the 2008 financial crisis, Bitcoin developer, Satoshi Nakamoto, decided to create a digital currency that operated outside of the purview of central governments and big banks. It was intended to facilitate peer-to-peer transactions in the digital age.
To do this, Bitcoin needed an accounting mechanism that was quick, secure, transparent, and efficient. Thus, the blockchain was born.
Rather than relying on centralized servers to govern the currency, the blockchain distributes the database across hundreds or even thousands of computers located all around the world. These computers use a pre-determined validation mechanism to ensure that transactions are accurate before adding them to the ledger. Once they are entered in the chain, the blockchain creates an unchangeable record of transactions that cannot be altered or tampered with.
This system works well for digital currencies, but it also serves as a platform for new companies that want to develop on top of its functionality. Today, there is an abundance of public and private blockchains that are facilitating everything from enterprise business solutions to financial services.
Praise from People in High Places
In this capacity, the blockchain received high-level endorsements from the U.S. government, enterprise leaders Microsoft and IBM, and financial institutions including J.P. Morgan Chase and Mastercard.
In their 2018 Join Economic Report, members of the U.S. Congress described the blockchain as “largely resistant to hacking,” and they noted that “the blockchain has many more potential applications.”
Meanwhile, staunch crypto skeptic, J.P. Morgan Chase CEO, Jamie Dimon, described the blockchain as “real,” which is a powerful admission for an influential but cynical industry leader.
Even so, praise and potential are different than functionality and accessibility, so it’s worth wondering: “what can the blockchain actually do for me?”
What the internet did for communications, blockchain will do for trusted transactions
Emerging Usability. Dynamic Versatility.
The blockchain has obvious implications for network security, reliability, and ease-of-use. However, its most compelling trait is its ability to facilitate trustworthy transactions without loading up consumers with fees.
Traditional financial institutions have to collect fees to sustain their employment base and their costly infrastructure. In contrast, blockchain-based platforms can build new systems from the ground up that subvert these models and provide a better customer experience.
For example, tech luminary, IBM has made a pivot away from antiquated business models and has made a serious push into blockchain technology. As CEO, Ginni Rometty, notes, “What the internet did for communications, blockchain will do for trusted transactions.” It’s changing the way we think about transactions, and it’s allowing companies to rebuild their pricing models without compromising service.
This is excellent news for consumers. Better services and lower costs are both ideal for customers, and a tokenized ecosystem makes that a sustainable and viable businesses model.
The Harvard Business Review observes that the blockchain “can significantly reduce transactions costs.”
Of course, all blockchain’s are not created the same. Public blockchains like the one powering Bitcoin can be inundated with excessively high fees that drive away users and diminish the platform. In December, journalists were reporting Bitcoin fees as high as 40%. According to CNBC, at the time, the average person was paying $28 in transaction fees each time they wanted to move their currency.
Fortunately, private blockchains and the services that they support can prioritize the customer experience by reducing or eliminating transaction fees. By issuing a unique digital token, companies can cover their costs using money garnered from an ICO or from minting new issuances of their token.
That’s the approach that we’ve taken at Digitex Futures. On our futures trading platform, there are no commission or transactions fees because we mint new DGTX tokens to cover costs. In doing so, we ensure that our customers can focus on making compelling investments, not worrying about fees and ancillary costs.
Especially in crypto futures markets, it’s not uncommon for fees and commissions to significantly impact the profits derived from sound investments. By embracing the blockchain’s ability to facilitate transactions while eliminating fees, Digitex Futures is prioritizing the customer experience while creating a sustainable business model that continues to proliferate as the platform becomes more popular.
With so many companies and innovators looking to the blockchain as the next-generation technology that will power future platforms, it’s not long before this is the definitive model for businesses of all types, and those that get on board early will reap the benefits the fastest.