Brace for Blockchain Impact

Since bitcoins spike in late 2017, cryptocurrencies have seen a harsh winter with prices dropping across the board. No more headlines in mainstream media about the prices surging every day, no more hyper funded ICO’s and no more “blockchain is overthrowing traditional banking within a few years”.

But during the crypto winter, some of the world’s leading brands have started picking up the blockchain technology. Nike, Facebook, Range Rover, JP Morgen, Walmart to name a few. And as the bitcoin has slowly started to regain its momentum this spring, so has the enthusiasm about the technology.

“Despite political turmoil, I believe in the future because of new technologies. It can better our economy, democracy and overall lives. But people don’t care about the blockchain. They care about cheaper and better solutions,” Brian Mikkelsen, CEO at The Danish Chamber of Commerce, said at the European Blockchain Convention in Copenhagen back in May.

Many of the celebrated brand’s use cases for blockchain still mainly consist of ideas and promises, but that might be where it all has to start.

“You have to start with a use case, preferably a simple one, and then make it more advanced during the roadmap. And you also need to get partner aboard the solution in order to gain from cooperation. Think big – start small,” Christian Lassen, Nordic Leader for IBM Blockchain, says.

This is still the early days. Blockchain’s promise for getting rid of intermediaries everywhere grant financial inclusion across continents and even better democracy through decentralised, trustless networks have yet to become reality. But hundreds of projects have used the crypto-winter to undisturbedly think big and actually start real-world projects.

Company: MakerDao

Use case: Remittance
Value proposition today: Stable cryptocurrency for remittance across selected countries in Europa, Afrika, USA, South America and soon Asia. Low fee and transferred in a matter of minutes.

International money transfer has historically been expensive and slow. Studies snow remittance fees average at 7 per cent – and in some cases run as high as 25 per cent of the transferred amount – while taking several days to execute.

MakerDao wants to do better with its digital currency ‘Dai’. Currency pegged to the value of American dollars (giving it the stability of FIAT valuta) while still having the benefits of cryptocurrency on a blockchain (speed, low fees and transparency).

This means MakerDao has become a valuable tool for remittance with more than $80M Converted to digital Dai-dollars.

MakerDao’s current solution allows an American user to exchange dollars into Dai, then crypto-transfer Dai to an Argentinian user, who can exchange it back to Argentinian pesos through a local exchange. All sub 1 per cent fee in a matter of minutes.

A test-service has already been build in order to make the service automated and seamless – essentially allowing the US and Argentinian users to do the same thing without having to care about Dai. When this service goes public it will look and feel like a traditional bank transfer – just faster and cheaper thanks to MakerDao’s crypto infrastructure.

Company: TradeLens

(Backed by IBM and Maersk)

Use case: Value-chain & Shipping
Value proposition today: A database on a blockchain for unified, digital shipping – cutting the expenses for ­paperwork and trusted intermediaries.

The shipping industry is littered with intermediaries who connect shipping companies, freight forwarders, ports and authorities. Up to 20 per cent of the cost of shipping a container is spent on documentation.

Maersk and IBM have jointly developed the blockchain platform TradeLens to solve this. The blockchain creates a safe, inedible record for the whole supply chain to trust without expensive intermediaries, which has the potential to make the whole value-chain paperless, frictionless and trusted.

One of the big challenges for this unified blockchain platform to become global is convincing huge companies to work together on the same platform – especially when it’s co-owned by one of the leading players in the shipping ­industry.

100 shipping companies, freight forwarders and ports was convinced during the first year, while two of the major ­ocean carriers – CMA CGM and MSC – only joined the platform in late May.

While there is still a long way to go before the ­platform ­becomes industry standard, it is already being used
– processing 10 million events on their blockchain every week.

Company: Propellr

Use case: Tokenization of real estate
Value proposition today: Financing and investing in real estate through tokenization on the blockchain

On one hand, real estate development is a costly endeavour which can result in hefty pressure from traditional banks if the new condos aren’t sold for the right price. On the other, it has traditionally been an investment space with a high entry barrier.

Both of those can be solved by tokenizing real estate: A process of presenting ownership of real-world assets digitally on the blockchain.

This allows developers to essentially crowdfund their real estate while lowering the barrier to real estate investing by selling smaller, digitized pieces of real estate instead of whole houses.
The company Propellr does it on the blockchain to ensure transparency and fluidity of the real-estate pieces. At the same time, this allows for automisation of interest payments for investors.

Last year the first $30M dollars Manhatten real estate property was tokenized. A statement that the technology and framework is very real – and ready to be applied in the real world.