Adel ▲ Opinion ▲ 14 ▲ Crypto, For the People, By the People

Crypto, For the People, By the People

How Blockchain Subverts Today’s Entrenched Power Structures

By:  Gabriel Dusil, co-Founder & General Manager,
Adel Ecosystem Ltd.
&:  John McLeod, Founder,
JEA Associates Ltd.

Mankind has been shaped by borders, whether physical, geographical, technological or financial. Societies have found ways to structure themselves into coherent and ordered blocks. Over the last few centuries empires have risen and fallen, wars have been waged and physical borders have moved. Governments, institutions and multi-lateral structures underpinning political and financial borders have remained intact.

The financial crash of 2008 shook public confidence in banks and government-backed financial institutions that saw billions of dollars, euros, and pounds spent on shoring up the financial system through quantitative easing. Public confidence in financial institutions and governments was at an all-time low. It is no coincidence that Bitcoin emerged out of this economic crisis where traditional institutions failed. A viable alternative was needed without the oversight of big-brother.

Blockchain services undermine traditional forms of governance because it’s decentralized and its users are typically anonymous. This assumes impunity from government and central banks. Anonymous actors are micro components of a growing ecosystem. To date, this crypto sphere has been relatively left untouched by the authorities of the “real-world”, where regulation typically lags innovation.

This raises real questions about how crypto’s services should be managed. Techno-libertarians envision utopian self-regulation, with codified rules that evolve with the technology. Anyone who denies these programmatic rules essentially forfeits their right to participate in this space. Crypto-anarchists envision a free-rule zone for blockchain businesses and unconstrained virtual currency commerce. Within this zone, blockchain businesses would operate free from government intervention and regulation. Bitcoin is essentially a sandbox experiment that is demonstrating how crypto technologies will be successful and be applied to real-world scenarios.

Bitcoin is a sandbox experiment,
demonstrating how crypto will be successful.

Whichever form it takes, blockchain technology will need to entertain the notion of regulatory oversight, for it to gain mainstream acceptance. For this to happen, both the public and private sectors should have a seat at the same table, to establish a common ground for governance and enforcement.

Creating and adopting an agreed set of standards requires consensus from all major stakeholders. Internet’s protocols (e.g. TCP/IP, HTML, and Java) took years before reaching mass adoption. But eventually, this was achieved through well-constructed and easy to implement standards. Crypto coders redefining their own product lifecycle to accelerate adoption by excluding the powers-that-be from the socio-economic power pyramid. For the time being, they are at the pinnacle of this power hierarchy, with governments, banks and even citizens treated as outsiders. But history has shown that closed solutions are not scalable, to the same potential as standards. Any developer can set the rules of their homegrown blockchain. Have the geeks inherited the earth?

We have reached a unique point where the traditional power brokers who normally put the brakes on disruptive technologies have been sidelined in favor of a newly defined crypto power hierarchy. Governments nor banks control the crypto sphere, but they maintain partial control of cyberspace and the real world. Within the isolated world of crypto this hierarchy works, but if mass market adoption is the plan then consensus with the brick and mortar world is needed. The open question is whether this is in the interest of crypto coders, miners, and service providers.

Who could have predicted the spectacular rise in the value of Bitcoin and Ethereum just five years ago? A 100 US$ investment in Bitcoin in 2013 would now be worth 7000 US$ today[i]. Satoshi Nakamoto could not have predicted the creation of nearly 4000 virtual currencies on CoinLib[ii] ten years after releasing his white paper and over 100 thousand token contracts[iii] on the Ethereum blockchain. Only a brave person can envisage what the next five years have in store. It is safe to conclude, however, that crypto has proved its detractors wrong and its potential benefits to humanity are vast. Interoperability, scalability, security, and ease of use for the average person are all questions that need to be answered.

For the first time in history, people have the potential to break down the traditional borders that have divided them, whether geographically, technologically or economically. Individuals are empowered to create crypto services free from government regulation or any other centralized authorities. We have currency for the people by the people, and of the people, only time will tell which direction it takes, and who shapes its future.

About the Authors

Gabriel Dusil

Gabriel is a sales and marketing expert with over 25 years in senior positions at Motorola, VeriSign (acquired by Symantec in 2010 for 1.250 billion US$), and SecureWorks (acquired by Dell in 2011 for 612 million US$), and Cognitive Security (acquired by Cisco in 2013 for 25 million US$). He is a blockchain entrepreneur, with strengths in international business strategy. Gabriel has a bachelor’s degree in Engineering Physics from McMaster University in Canada and expert knowledge in blockchain incubation, cloud computing, IT security, and video streaming, and Over the Top Content (OTT). Gabriel also runs his own company, Euro Tech Startups s.r.o., and manages a professional blog at https://dusil.com.

John McLeod

John has spent nearly a decade working for a number of leading public relations firms in London, focusing primarily on PR management in the financial services sector. John’s expertise includes blockchain technology and the evolution of cryptocurrencies in financial services. That’s why he recently founded his own consulting firm, JEA Associates Ltd., which is specifically positioned to communicate the value proposition of this burgeoning technology. John has spent the past year successfully executing campaigns for a digital currency consultancy, decentralized financial solutions, and online payments platforms.

About Adel

adel.io | Blockchain Agnostic Technology Incubator

Adel is a technology incubator for blockchain innovation. Our community collaborates on ideas and uses the AdelWiki™ to collectively create business plans. Members vote on projects and can become profit participates when they are launched. Expertise within the community brings mentoring, learning, and employment opportunities. Successful projects are re-invested for further growth or issued as rewards to members. Adel is blockchain agnostic and will harness the features of any open-ledger platform to showcase its potential. Our mission is to incubate projects that will positively change the world.

▲ Adelphoi | Digital Currency for Adel Ecosystem

Many virtual currencies are utility or equity tokens on their corresponding blockchains. The Adelphoi (ADL) coin is different, in that it uses a comprehensive process of Idea2Project incubation, to fuel its own ecosystem.

References

[i] https://www.xe.com/currencycharts/?from=XBT&to=USD&view=1Y

[ii] https://coinlib.io/coins

[iii] https://etherscan.io/tokens?p=10

More Opinions

Check out more Adel opinions via these links:

▲ 1 ▲ The Right Path to Funding Decentralized Organizations

▲ 2 ▲ The Next Evolution in Funding Innovation

▲ 3 ▲ A Philosophy for Blockchain Integrity

▲ 4 ▲ A Collaborative Blockchain Incubator

▲ 5 ▲ Blockchain Diversity & Passion

▲ 6 ▲ Blockchain Startup Expertise

▲ 7 ▲ Blockchain Portfolio Diversification

▲ 8 ▲ Blockchain Incubation to Employment

▲ 9 ▲ From Blockchain Innovation to Execution

▲ 10 ▲ Blockchain Will Transform Retail Lending

▲ 11 ▲ The Next Evolution in Crypto Trading

▲ 12 ▲ Crypto Trading for Everyone

▲ 13 ▲ Architecting Crypto Financial Instruments

▲ 14 ▲ Crypto, For the People, By the People

Adel ▲ Opinion ▲ 13 ▲ Architecting Crypto Financial Instruments

By: Gabriel Dusil, co-Founder & General Manager, Adel Ecosystem Ltd., & John McLeod, Founder, JEA Associates Ltd.

Paving the Way for Crypto Financial Instruments.PNG

Since Blockchain technology entered the mainstream consciousness, its potential in traditional financial services and ability to disrupt existing industries has been widely discussed. Areas such as retail, trade, logistics and syndicated loans remain incredibly convoluted with many phases of verification and confirmations before transactions are completed. Blockchain tech can streamline these processes and bring similar value to what the internet did for the information age.

Less understood is blockchain’s potential in cryptocurrency transactions. By definition, their deployment is less evolved when compared to their regulated counterparts. Executing trades, hedging currency swaps, binary options, and posting contracts are more established with fiat services.

Peer-to-peer Decentralized Cryptocurrency eXchange (DCX) allow peers to hedge, speculate or trade different cryptocurrencies based financial instruments such as Spot, Swap, Forward, and Loans. DCX’s are typically based on Ethereum smart contracts, where trading parties agree on all parameters without the need for third-party remediation. Smart contracts aim to provide additional security to traditional contract engagements and reduce transaction costs.

As a crypto trading platform, DCX’s will evolve in step with rapid changes in the blockchain industry; its initial phase will offer a Crypto Spot financial instrument, meaning cryptocurrencies that are traded on-the-spot. The spot exchange rate is the price to exchange one currency for another for immediate delivery, representing the price buyers pay in one cryptocurrency to purchase a second one. The spot exchange rate is for delivery on the earliest value date. The aim is to complete this process in near real-time, revolutionizing the standard settlement offered by traditional banks, which can frustratingly take several days.

Forward contracts are another service DCX’s aim to disrupt. This instrument is when two parties buy or sell an asset at a specified price on a future date. A crypto forward can be used for hedging or speculation; however, its non-standardized nature makes it particularly appropriate for hedging. Unlike standard futures contracts, this one can be customized to any commodity, value and delivery date.

This new and relatively unexplored area of digital currency swaps is an area of crypto finance that DXC’s aims to address. Traditionally, foreign exchange swaps take place when bankers agree on a certain price for the currency to be exchanged. Crypto Swaps allows for digital currencies to be used to fund charges designated in another cryptocurrency, without acquiring foreign exchange risk, allowing companies to manage various digital currencies more efficiently. In addition, these instruments enable traders to sell a contract to option holders that give them the right, but not the obligation, to buy or sell a cryptocurrency at an agreed-upon price, during a certain time period. Crypto smart contracts enable traders to agree on when to buy and sell digital assets, currencies, and holdings when set parameters have been reached.

The impact of blockchain on traditional financial services will be huge. A recent report by Accenture1 cited that eight of the world’s largest banks could potentially save 8 billion US$ on a cost-base of 30 billion US$[i], by improved centralize finance reporting, savings on compliance, operational costs, and business operations. This costs saving doesn’t even take into account improved service times, stronger capital bases and greater accessibility for opportunities in unbanked areas of the world.

Services such as Adel’s iFin (www.adel.io) aims to evolve crypto trading beyond banks that are rooted in legacy supply chains and physical infrastructure. DCX’s have the potential to be the digital interface where anyone, irrespective of their geolocation and experience, can log in, execute trades, and agree on smart contracts that suit their individual needs. By doing this, DCX empower people to build their portfolio, without expensive intermediaries and weighed infrastructure inefficiencies. Crypto has exposed a market gap of users wanting unabated access to an interoperable cross-blockchain platform, enabling an ecosystem of users anywhere in the world to interact and trade, free from brick and mortar intermediaries. Its potential applications are limitless.

[i] Banking on Blockchain, a value analysis for investment banks: https://www.accenture.com/t20170120T074124Z__w__/us-en/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Consulting/Accenture-Banking-on-Blockchain.pdf#zoom=50

More Articles

Check out other articles:

▲ Blockchain Will Transform Retail Lending

▲ The Next Evolution in Crypto Trading

▲ Paving the Way for Crypto Financial Instruments

About the Authors

Gabriel Dusil, co-Founder & General Manager, Adel

John McLeod, Public Relations, Adel

  • John has spent nearly a decade working for a number of leading public relations firms in London, focusing primarily on PR management in the financial services sector. John’s expertise includes blockchain technology and the evolution of cryptocurrencies in financial services. That’s why he recently founded his own consulting firm, JEA Associates Ltd., which is specifically positioned to communicate the value proposition of this burgeoning technology. John has spent the past year successfully executing campaigns for a digital currency consultancy, decentralized financial solutions, and online payments platforms.
  • LinkedInhttps://uk.linkedin.com/in/john-mcleod-a323799

More Opinions

Check out more Adel opinions via these links:

▲ 1 ▲ The Right Path to Funding Decentralized Organizations

▲ 2 ▲ The Next Evolution in Funding Innovation

▲ 3 ▲ A Philosophy for Blockchain Integrity

▲ 4 ▲ A Collaborative Blockchain Incubator

▲ 5 ▲ Blockchain Diversity & Passion

▲ 6 ▲ Blockchain Startup Expertise

▲ 7 ▲ Blockchain Portfolio Diversification

▲ 8 ▲ Blockchain Incubation to Employment

▲ 9 ▲ From Blockchain Innovation to Execution

▲ 10 ▲ Blockchain Will Transform Retail Lending

▲ 11 ▲ The Next Evolution in Crypto Trading

▲ 12 ▲ Crypto Trading for Everyone

▲ 13 ▲ Architecting Crypto Financial Instruments

▲ 14 ▲ Crypto, For the People, By the People