Blockchain’s first revolutionary product could be online ID
Recently the prospects for blockchain was discussed – the encrypted, decentralised online ledger system that underpins Bitcoin and myriad other cutting-edge projects.
In an interview, PayPal’s chief executive, Dan Schulman, recently discussed the prospects for blockchain – the encrypted, decentralised online ledger system that underpins Bitcoin and myriad other cutting-edge projects. While talking about blockchain’s potential for improving how people make payments around the world, Schulman said:
We think there’s a lot of promise to blockchain technology … but it really needs to do something that the traditional rails [of the interntional payments system] can’t do. Most people think that blockchain is about efficiency, but the system today is pretty efficient. There are middlemen sometimes in between, but the rails of it are pretty efficient. So we think a lot of the neat stuff that can happen on blockchain is around identity, for example.
Schulman was referencing a debate around payments that has been going for a few years. Without getting too technical, the main benefits of blockchain payments are that they are not controlled by middlemen, so there are no fees to pay; and transactions can’t be hacked and changed once they are on the ledger.
But at the same time, they are not yet as quick at processing transactions as the traditional system – which as Schulman argues, is fast enough in any case. Regulation is also a major issue: people on either end of a blockchain payment are completely anonymous. This presents major issues for everything from money laundering to being able to reclaim payments if you accidentally credit the wrong address.