When it comes to generating buzz, it’s hard to beat blockchain.
While many of us think of payment applications and cryptocurrencies (like Bitcoin), the reality is that there’s more to blockchain.
Blockchain has business potential beyond just providing new types of currencies. While payment is a big part of it, there are also applications like smart contracts and intellectual property protection.
And it’s not just the fringe interested in applications these days. Mainstream companies are increasingly interested in blockchain and its potential.
Partnerships with Blockchain Companies
One of the interesting developments at CES a couple months ago was the continued investment by mainstream companies in fintech.
However, there was also interest in blockchain developments at CES. Mainstream companies are taking notice of what’s out there. On top of that, the growing consumer interested in blockchain provides opportunities. Forward-thinking companies want to be on the ground floor.
One of the most interesting partnerships moving forward with a mainstream company is the way Samsung SDS is partnering with Blocko to add blockchain capability to the Samsung Card.
Samsung and Blocko Join Forces
Many corporations offer credit cards. It’s a way to encourage loyalty and it can be another revenue stream. Samsung is no different. Samsung SDS offers the Samsung branded credit card.
What is a little new is the idea of adding blockchain technology to credit cards. According to ZDNet, Samsung SDS is looking for help developing more payment options. Plus, digital identity is a big part of blockchain as well.
The idea is to allow consumers to use credit cards to engage in secure transactions. The Samsung deal is aimed at creating new businesses using digital identity, digital money, and digital payment.
Not only that, but Blocko and Samsung SDS also plan to look for opportunities to bring blockchain technology to the financial markets.
Adding Blockchain Technology to Mainstream Payment Options
The idea is to secure transactions with blockchain technology.
It’s not just about using Bitcoin and other cryptocurrencies. Although these cryptocurrencies are increasingly popular.
In fact, companies experimenting with blockchain payments aren’t doing it with alternative currencies. Instead, they are using the technology to secure transactions as much as possible. They are using blockchain technology with traditional currencies — dollars and euros and the like.
Last year, payment processing giant Visa started testing an interbank payment system that involves blockchain.
Adding blockchain to credit cards and interbank transfers could be a big step toward securing the system and moving toward a frictionless system. Visa’s interbank transfer experiment was meant to help banks send money to each other easier.
But it can also be used for person-to-person transactions. Blockchain makes use of a shared digital database that records and verifies electronic transactions. It takes place without a central ledger, instead relying on a network of computers. You could send money easily to someone else using this technology.
Cryptography is a big part of the blockchain ecosystem in order to prevent fraud and protect users and consumers from hackers.
Adding blockchain capability to credit cards and debit cards could be an even bigger deal.
Bitcoin Debit Cards?
For now, mainstream investments in blockchain technology are mostly about securing transactions and verifying identities.
But what if cryptocurrencies became part of our plastic money landscape? There are Bitcoin debit cards, but they don’t allow you to spend Bitcoin directly.
Instead, you store a balance on the card and then can access that balance to make more traditional transactions. You can get cash from an ATM or swipe the card at any store that takes the card. You can even use other cryptocurrencies, like DASH, if they are compatible with the card.
When you make transactions, your cryptocurrency balance is accessed, and the necessary amount is changed into more traditional currency so you can spend it.
Blockchain debit cards are designed to help you bridge the gap between cryptocurrencies and a world where they aren’t fully accepted.
Adding a credit card component might be interesting. Imagine if you could borrow in cryptocurrencies to complete transactions and then repay when you receive your payment in turn.
Plus, there might come a time when cryptocurrencies are more widely accepted and you won’t have to choose a card that converts your Bitcoin into traditional currency.
Smart Contracts and Payment Settlement with Blockchain
Even if mainstream companies aren’t quite on board with the idea of using cryptocurrencies, they do like blockchain technology.
MasterCard has been developing blockchain APIs. These APIs focus on smart contracts and payment settlement.
This is where blockchain can really shine when it comes to business applications. However, these uses for blockchain don’t get a lot of play.
The way blockchain is set up, it’s possible to create smart contracts that make it easier to verify the terms of an agreement are met. The public, decentralized ledger helps. But so does the fact that certain actions have to be taken to verify the transaction.
Smart contracts are a way to further secure agreements.
Payment settlement using blockchain technology also makes a lot of sense. It can be accomplished quickly, and almost without friction. This is one of the reasons Visa is testing out interbank transfers.
Escrow accounts could be managed in completely different ways with the help of blockchain technology. Plus, when it comes to business payments around the world, you can skip the problems that come with the exchange rate. Businesses could change the way they do things globally.
A lot of the applications so far are business to business. However, consumer-driven blockchain solutions are also possible in the future.
Consumer Applications for Blockchain Technology
It’s not just about smart contracts and payment settlement for business. There are plenty of consumer applications as well.
Imagine being able to complete mortgage paperwork without the need for an in-person signing. With blockchain technology and intelligent signatures, it might be possible. You could close your home sale from across the country. No need to fly back. No need to sign documents and then overnight them (which can get expensive).
Last time I signed major legal documents, I needed to be in the presence of a person. They had to verify my identity. It involved appointments and bringing in my ID, and a bit of hassle.
With blockchain technology, though, some of that hassle could be eliminated. I found it interesting that the Blocko/Samsung SDS deal also focuses on digital identity applications. Digital identity through intelligent signature means a whole new way of conducting personal busines.
You could sign mortgage papers, divorce papers, or get a marriage license squared away digitally. No need to schlep down to an office somewhere.
There are other consumer applications as well.
Imagine using blockchain technology for smarter coupons. You could more easily transfer money to friends and family. It’s nice, too, that in many cases these transactions come with lower fees.
Savings and simplicity with blockchain technology.
Bottom Line: Blockchain Can’t Be Just about Cryptocurrencies
Blockchain technology isn’t mainstream — yet.
It’s getting there, though.
Major payment processors and other corporations are interested in the possibilities.
And this type of investment in blockchain technology is what is most likely to bring it into the consumer mainstream. But it only happens if we stop viewing blockchain as the exclusive domain of cryptocurrencies.
It’s true that cryptocurrencies are gaining wider acceptance, and it’s even possible to do some of your shopping online and offline using tools like Bitcoin, DASH, and Bitpay.
However, blockchain adoption isn’t just about cryptocurrencies. It’s about a technology that offers a number of options for security and accessibility.
You don’t need to start mining Bitcoin or accept payment using DASH in order to benefit from blockchain technology.
With the investments made right now by big companies, we could see more applications down the road.
And many of them might be aimed directly at consumers.