An interview with Pema Banigan and Zac Skeith, written by Claire Halley Robbins
What IS blockchain?
“Currently, most people use a trusted middleman such as a bank to make a transaction. But blockchain allows consumers and suppliers to connect directly, removing the need for a third party.” – Hutt, 2016 (World Economic Forum)
A blockchain is a shared record of transactions–a decentralized ledger, secured cryptographically, that is append-only. This means that the the ledger cannot be edited or altered once information is added and stored to a block. Blockchain allows for efficiency and the reduction of transaction costs when transacting anything of value, be it cryptocurrency, fiat, deeds, property, or personal medical information. The blockchain also has the ability to automate the terms of a contract, whether that includes the exchange of money, or really anything of value, without a middleman through ‘smart contracts’.
What’s the relationship between blockchain and Bitcoin or other cryptocurrencies?
Blockchain is the underlying technology that supports applications like Bitcoin, and other cryptocurrencies.
Built on the foundation of blockchain technology, Bitcoin (the first use case of blockchain) was launched in 2009. Bitcoin and other cryptocurrency transactions are recorded on a blockchain but blockchain has many uses beyond Bitcoin and other cryptocurrencies.
How is blockchain changing the Canadian financial industry?Will blockchain change the way I bank in the foreseeable future?
Bitcoin, the first blockchain use case, was created in response to the 2008 financial crisis. With financial transactions as blockchain’s initial purpose, it follows that the the financial industry would be disrupted in some way by the advent of this technology.
The financial system will, no doubt, benefit from integrating blockchain technology. The current financial system is complex and the volume of transactions is climbing at an exponential rate – this complexity increases inefficiencies and vulnerability to risk. At the moment, Canadian banks are taking action by investing in R&D internally and joining consortiums. However, blockchain is still in the infancy stage and as of yet, there is nothing on the consumer side that would change the way the average Canadian banks. Blockchain, therefore, will change the Canadian financial industry, but perhaps not in the earth-shattering manner early adopters of the technology would have hoped.
What other Canadian industries might be (or already are) disrupted by blockchain?
Transactions, contracts, and records of those exchanges are the foundation of our economic, legal, and political system, governing interactions between individuals, businesses, governments, and nation states. Therefore, Blockchain has the potentialto disrupt most, if not all industries. Whether it will disrupt all industries is a different story. Many industries are experimenting with blockchain technology to see the potential impact it can have on pain points and new opportunities.