Silicon NYC has been a leader in covering the evolving niche trends in blockchain technology emerging from New York City. This month, in partnership with Blockchain Driven, it held an event with a number of thought leaders in the space—The Future of Blockchain Tech: Applications in Finance and Beyond.
Blockchain’s singular ability to automate finance and government is the top focus of the entire New York City fintech ecosystem, and this high-energy, high-value event sold out days in advance and brought in over 150 attendees and innovators from across industries.
Speakers included Peter Borovykh and Kirill Gourov from Blockchain Driven, and Solomon Lederer from Blockmatics, experts in the field who have worked across multiple industries and have collectively arrived at blockchain as the epicenter for the future of financial technology to drive the industry forward. They presented on the future of blockchain and its likely impact on our future.
The event got to the heart of the matter concerning the fintech blockchain technologies and trend development. The event covered the beginnings of blockchain, its rise, how companies are using blockchain and hyper ledger, quickly going over private vs public blockchain, and multi billion dollar opportunities that this technology potentially presents for banking, hedge funds and almost anyone in finance space. A truly eye opening event.
Here is the video and speakers: Enjoy!
After the event, I went backstage and sat down with each of our speakers for a quick interview. Here is their expert take on the growing blockchain ecosystem and its ramifications for the future of finance. Since money, how much we have of it and how much control over it, directly influences the quality of our lives, fintech is likely to be the most important use case of blockchain, and was the one topic that dominated both our event and this interview. Move over bitcoin, blockchain tech is coming into its own.
About our Speakers:
Peter Borovykh is a Blockchain Solution Architect for Blockchain Driven. A quantitative financial expert, he has created a groundbreaking algorithmic trading strategy based on quantifying market sentiment and leveraging the emotions of market participants. His book, Blockchain Applications in Finance, highlights high-level use cases of how blockchain can transform the financial industry for the better.
Kirill Gourov is a CFA and Blockchain Fintech Specialist for Blockchain Driven. He has been an innovator in the blockchain space from the beginning, and directs startup companies and financial institutions on blockchain technology application and future proofing the financial services value chain at Blockchain Driven. His insights have been covered by several major publications including the New York Times, Financial Times, American Banker, and Coindesk.
Solomon Lederer received his Ph.D. in distributed and ad-hoc sensor networks at Stony Brook University in 2010, where he invented new methods for network self-organization. He went on to apply this research into developing wireless networks for the U.S. Air Force. Afterward, he moved to develop computer systems for the finance industry. Once he discovered blockchain, he moved onto developing a digital autonomous organization on the blockchain. He has been teaching about blockchain and Ethereum for 2 years.
Here’s the full interview:
Silicon: Thanks, Peter, Kirill, Solomon, for taking the time to help me put this together. I want to first ask you all a question and get your feedback on it: What was your main message of the night and what did you want attendees and our readers to take away from your speeches?
Soloman Lederer (SL): The internet is the best reference we have to an emerging technology such as the blockchain. Looking back, we all recognize that knowing about email and the web early on was an advantage to a person’s career, business and lifestyle, although back then no one would have been able to explain exactly how. Same with blockchain, it’s up to everyone to understand the technology and imagine for themselves where it fits in in their current business, however small the advantage may currently be. There will be no watershed moment. The technology will chip away at our current workflows and operations until we one day notice our world is different.
Kirill Gourov (KG): There are lots of conflicting interests attempting to “define” the term Blockchain, confusing new entrants and leaving them permanently uncertain of the space. By understanding that blockchain is in fact a natural progression of work done in the 90s, combined with cheap storage, rapid computation, and fast internet, it is easier to cut through confusing analogies and begin to think through real use-cases and opportunities.
Peter Borovykh (PB): The blockchain solves a very important problem of trust that has not been properly solved by any other technology. Any B2B and B2C (and for that matter, C2B and C2C) interaction that requires a transfer or exchange of a medium of value will inevitably integrate blockchain technology in the near future. If your department, organization, or industry is heavily involved in transacting anything of value, watch out and prepare for a break-through disruption.
Silicon: Solomon, I like where you’re taking the discussion. From what I understand, blockchain has both personal and universal applications. What, in your opinion, are sure to be the most impactful personal and universal use cases of the technology in both contexts?
SL: The blockchain will allow for the emergence of micro-services, services involving small monetary value or scope. Long strings of such services will be strung together and be interchangeable. The blockchain as a trust-chain will be the backbone. Take insurance as an example: It will be possible to take out a $5 insurance policy, or take out 100,000 $5 policies to insure a $500,000 home. On the flip side, the blockchain will make it possible for individuals to act as the counterparty on these $5 policies.
Silicon: What about you, Peter? You’ve worked in a variety of spaces over the course of your career. I get the feeling you have a really comparative view of where different industries stand to benefit or lose out when it comes to large-scale adoption of blockchain. Where would you say has the potential to benefit or lose most? What are some signs indicating that? What would you like to tell our readers in the context of your speech?
PB: Blockchain was named one of the top 12 emerging technologies by the World Economic Forum in 2017. The Federal Reserve Bank, FINRA, and the SEC are already initiating discussions and taking action to integrate this technology into the day-to-day operations of banks, insurance companies, asset management firms, and hedge funds. The climate of tighter regulations almost instigates financial institutions to improve their top line by rather aggressive cost-cutting, which places distributed ledger and blockchain technology on every bank’s agenda early on. While blockchain opens up many new venues and markets in the long term, it is fair to assume that the areas of payment verification, customer verification, and contract verification will have the most impact in the short term.
Silicon: Sounds like attack of the early adopters! Let’s divert to a more lay perspective. Most people identify the word “blockchain” with “bitcoin”, which is a cryptocurrency. Kirill, you’re a blockchain fintech specialist so I’m going to direct this question to you: What are your insights on the most supportive use cases of blockchain technology linked to cryptocurrencies like Bitcoin or Ether for financial institutions as they exist today? What are some of the most destabilizing or disruptive? Building off of what Peter was talking about, what would you like to tell our readers from the banking sector re: what they should be focusing on and how to drive value from this alternative asset to benefit their organizations?
KG: Today, Bitcoin is growing in use as a cross-border payment rail. Businesses can save on 2-4 weeks on working capital per transaction, which is a very meaningful gain. Although I personally see the value in a public ledger and network, I don’t believe that existing governance structures are set up on Bitcoin/Ethereum to create a peace of mind with respect to developing enterprise products. As a base example, Bitcoin developers have been fighting the same fight for two years with no resolution.
However, most financial services firms are too quick to dismiss the potential of a globally decentralized immutable network. There are very interesting companies with public tokens doing work on [Internet of Things], media distribution, storage, and a slew of other industries. Public networks should be seen as another tool in the enterprise tool-kit.
Silicon: Back to you, Solomon. Lets talk primarily about the disruptive effect of the cryptocurrency use case. Blythe Masters, Digital Asset Holdings CEO, has said that blockchain has the potential to disintermediate the current financial system and the banks, etc. that are a part of it. Would you agree with that? Is that a favorable outcome? If not, how can blockchain professionals work together to strengthen and improve the current system? What would you like to tell blockchain professionals about how best to make that happen?
SL: The blockchain will do for banking what the internet has done to media. It will be far easier for small upstarts and individuals to encroach on their territory. We currently rely on large institutions because they’re the only ones we can trust with our pocketbooks. When an upstart doesn’t need to earn customers’ trust to service them–since the blockchain will be taking care of that, holding user funds in a transparent and predictable way–they can carve out niche services not being offered by the current financial system.
As far as whether this is a favorable outcome, we can ask: would you want to go back to the pre-internet days without the varied news, music and video outlets we have today? You’ll feel the same in 10 years when you look back at the financial services on offer today.
Silicon: We’ve got to wrap up here, and I’d like to field my last question with Peter. Can you condense your presentation into one central paragraph that you’d like readers to takeaway from the night?
PB: Imagine it is 1995. The Internet is still underground, and only a few individuals even heard about this term. I am writing about the Internet’s core function that provides faster, almost instant electronic messaging. I then post a question: “Which key business areas will be impacted?” Most would answer that the Internet would likely result in less paper and stamps. Very few would even dream of the possibility of Google and Facebook, let alone Snapchat and Uber. Internet gave us instant messaging; the blockchain will give us instant payment verification. And if it does not sound very ground breaking, let me give you the following analogy. It is already estimated that financial institutions could save up to $20 billion per annum by integrating blockchain. What’s even more exciting is that if the “paper and stamps” of banks is priced at $20 billion, imagine how large the Facebook and the Google of blockchain will be.
Silicon: Guys, you’ve been great. Thanks a bunch.
Check out our Startups on Blockchain exclusive story here. And stay tuned for more stories and events on the evolving blockchain ecosystem!