According to Google Trends, since the end of 2017, Bitcoin and blockchain architecture became one of the most trendy online queries. People from all over the world are searching in www for answers to questions, what Bitcoin and blockchain are, and how is it possible to make money on it. The topic of cryptocurrency has become highly popular with an estimate of 100% in Google Trends in 2017. In the Russian-speaking segment of the Internet, for instance, in Yandex, the word “Bitcoin” is gaining more than 2.7 million searches per month, and the search for the word “blockchain” in the Russian segment is made more than 200,000 times a month.
Cryptocurrencies and related technologies are interesting for the masses, and they also gradually penetrate into our everyday life.The development of the global Internet has influenced the banks’ operation as well. Today in Russia there is, for example, a fully online Tinkoff bank. The process of making and processing payments is accelerated and simplified with every year. Payment systems help us to spend more money and do it faster, substituting a leverage for the consumer society. It is already obvious that blockchain technologies will affect both modern payment systems and payment means simultaneously. And if it in the epoch of the Internet changes took a dozen years, in the era of blockchain everything can change in just a few years.
Undoubtedly, the blockchain will destroy or completely change the payment systems, to which we are all accustomed. Everything that now seems right and solid, can be changed within 5-10 years. Modern payment systems, such as SWIFT or SEPA, based on the participation of intermediaries acting as regulators and trust centers, which complicates the payment infrastructure and slows down money transfers across countries and continents.The possibility of creating a new format of transactions, the first attempts of which were in late 2017 – early 2018 using RippleNet technology – xCurrent, XRapid and xVia, was predicted by crypto-evangelists a few years ago, when blockchain technology was only developed by a few IT professionals. The emergence of a large number of cryptocurrencies and exchange platforms allows people who have not previously made financial transactions due to high transaction costs, to make them easily and quickly now.
Let’s compare: the system of European 24/7 instant payments SCT Inst (SEPA Instant Credit Transfer), comparable in efficiency with blockchain transactions, was introduced only at the end of 2017, while the work to create such a scheme was initiated by Eurobank as early as in 2014; this required the development of new standards, participation of European financial institutions in the work on the creation of this scheme, approval of the standard of financial micropayments at the level of the European Payments Union. The development of the same service by the Australian NPP (New Payments Platform) took twice as much – almost 6 years!
In the three years that were required for the appearance of SCT Inst, several revolutions have taken place in the cryptocurrency world: the launch of smart contracts, the creation of distributed applications, the abrupt increase in the market capitalization and the penetration of blockchain into the Internet of Things. It is obvious that with such financial and time costs of traditional technologies, the next stage in the development of cross-border payment systems will be the implementation of them on the basis of blockchain technologies. Whether it’s Ripple or its less known twin brother Stellar, or some new token based on a blockchain platform not existing yet with, for example, a modified unreliable but ultrafast Hashgraph consensus – it’s not so important, anyway we will get:
- Lower commission and transaction costs
- Storage of transaction data
- Simplified audit
- Investments in cryptocurrencies, leading to a decrease in volatility and an increase in the capitalization of the entire cryptocurrency market
- Transactions without restrictions worldwide
- A higher level of cybersecurity
- Low or zero-cost audit
- Greater degree of cooperation between financial institutions