Interview with Peter Borovykh: Author of ĎBlockchain Applications in Financeí
My guest today is a well known name in blockchain circles, Peter Borovykh, whoíll be giving us an insider view of global blockchain and cryptocurrency trends and projects. He is the author of ďBlockchain Applications in FinanceĒ and has spoken at events and conferences worldwide.
Peter recently spoke at the Blockchain for Wall Street Conference and now he is here to share his insights on global blockchain changes with us.†He is a leading blockchain and fintech consultant with BlockchainDriven, a blockchain and fintech consulting agency.
There are major differences in how developed and developing countries are going about utilizing blockchain and itís these differences that will determine how the global blockchain and cryptocurrency landscape is shaped.
Before getting started Peter cautioned that there are many projects heís apart of that are under non-disclosure agreements, so with that said we dove right in.
Bitcoinist: I know you do consulting globally. What are some of the trends youíre seeing? How does the work you do abroad compare to the US?
PB: Iíve been working on projects in a number of different regions that are showing high interest in blockchain applications. Latin America, the US, the Eastern Europe/Russia regions, and more recently, India. The most obvious trend is that developed countries are focusing more on blockchain applications and utility rather than on cryptocurrencies, whereas for developing countries itís the opposite.
Companies here in the US are directly going after disruption, in operations, payments, compliance, transactions, trade settlements, back office operations. I have an insurance client for example, looking to disrupt P&C insurance. Thatís property and casualty insurance, which has massive potential.
Bitcoinist: So then developing countries are focused on crypto?
PB: Yes. Developing nations want stock related to cryptocurrencies and crypto exchanges. Ultimately their goal is to move to the blockchain phase, bypassing the internet phase altogether.
Bitcoinist: Bypassing the internet phase?
PB: Thatís right. Here in the US payments are often done online, but in Russia for example, less than 1% of transactions are online. Theyíre lacking in trustworthy internet payment services. Thereís a Russian version of Google, Facebook, Uber, but no one there wants to input their credit card information since thereís a reasonable fear of being scammed. But blockchain can allow that to change and thatís what I mean by bypassing the internet phase.
Developing countries are seeking to move to a digital economy and blockchain is the best option to make that happen. Like Brazil, which is seeking a more traditional blockchain payment system, but most of the developing countries want the possibility of crypto exchanges. Even in India, Iím consulting on a business model for a trustworthy crypto exchange.
Bitcoinist: But Iíve heard of blockchain accelerators in Russia and Belarus. Doesnít that mean theyíre also going for blockchain utility like the US?
PB: Funny you should mention it, Iím actually consulting on the creation of that particular accelerator for Russia, Belarus, and Ukraine. Itís something theyíre considering, but realistically it would take a very long time for any blockchain to be integrated. Itís just like the issues weíre seeing with banks integrating blockchains here is the US.
Bitcoinist: Blockchain and finance do seem to go hand in hand. In the early days it seemed a no brainer. So what are the issues youíre talking about?
PB: Well even if you create a blockchain it still needs to be accepted and negotiated with the many stakeholders. Even if it is integrated, the whole point is that a community of companies have to integrate seamlessly right away, which is obviously very difficult, especially for large banks with more stakeholders.
That and for some reason, theyíve only been considering a horizontal network, which is just a horrible plan.
Bitcoinist: Can you explain?
PB: Sure. A horizontal network would make each of the banks equal across the network, but that raises issues since theyíll all be directly competing with one another. It raises the question of who gets to create the architecture. Obviously, competing banks wonít want to join.
Vertical is better in this case since it includes all the stakeholders in a supply chain, including the bank. So if a client buys something from a retail store, thatís one part of the vertical and it goes down the line directly to the bank. Itís the better solution for everyone, customers, retail, hospitality, banks. Whoever realizes that first is going to beat the enemy.
A horizontal network could possibly work for regional banks, but only if they all collaborated together. They could actually compete and outperform the larger ones offering a good solution and itíd be easier too since they have fewer stakeholders to go through.
Bitcoinist: What would be needed to make this a reality?
PB: Education. I canít stress it enough. I know that sounds odd, but right now no one knows much about blockchain which is leading them to misguided solutions. Especially the top decision makers. Right now the ones looking into blockchain for various companies are all right hands, who then need to educate the decision makers and it slows down the entire process with valuable information lost or misunderstood in the process.
Realistically, decision makers here in the US and every region of the globe need to stop pretending they donít have time. There are so many educational services, advisories, workshops, conferences, events. The opportunity to learn is out there, all they need to do is go to them. Organizations run the very high risk of being out of the loop, and this isnít something theyíre going to be able to catch up with once someone finally makes their big move.
Bitcoinist: Any prediction on who that will be?
PB: Itís anyoneís game, but the smaller banks have the resources plus fewer stakeholders to negotiate with. Going for a vertical network would be the smarter, more efficient, and faster move too. Ultimately, blockchain will allow frictionless, faster, more trustworthy transactions of any kind, payment, property, data, contractsÖ whoever does it first gets the unfair advantage to beat the competition economically and attract or steal more clientele.
It starts with the banks, but gaps in education and collaboration are the most important first steps. Itís why Iíve been working with EDC (Economic Development Corporation) NYC to spike roundtables and get different financial institutions together to talk about customer solutions.
Bitcoinist: I know youíre running low on time so Iíd like to get one more question in. Youíre one of the analysts working on the Global Cryptocurrency Evaluation Report, right? Any insights you can share?
PB: We were actually about to finish up the evaluations but Latin America jumped in out of nowhere. As Iíve been working in the region Iíve seen first hand how itís shaping up. If youíre interested in the new evaluation youíll have to attend the workshop Iím teaching in New York City next week.
Bitcoinist: Thank you for your insights and your time Peter.
PB: My pleasure.
What do you think about the global blockchain trends? Let us know in the comments below!
Images courtesy of BlockchainDriven.com and BlockchainFuture.com/Finance-Innovation