Out-of-the-Box Blockchain Use Cases

Jitendra Rathod, newsletter contributing editor, provides insights into how blockchain technology is changing the world. 

The nineteenth-century saw the discovery of electricity and soon enough it was put to use in practically all fields of life: from light bulbs to electrocution. Who would have guessed the upcoming events a century ago? 

The decade before us saw the growth of blockchain: another technology carrying the potential to change the world. And as it is with all the great inventions, blockchain offers qualities that can be put to use in several ways.

We have so far witnessed blockchain supporting the future form of finance: cryptocurrencies, which is very impressive. However, there is always room for more: here are 10 unusual blockchain use cases which would prove the worth of our beloved technology ten times over. 

1. The Infallible Watchman

There was a time when people used to hide their gold coins for fear they would be stolen: very long ago. Today, the threat is not the loss of treasures, rather, something more dreadful: identity theft. 

 Identity theft can be defined as the ‘deliberate use of someone else’s identity, usually as a method to gain a financial advantage or obtain credit and other benefits in the other person’s name, and perhaps to the other person’s disadvantage or loss’. According to a report by the U.S. Department of Justice, in 2014, around 17.6 million identities were stolen in America: these are not the statistics which could be overlooked. 

 Coming to blockchain, we know that it is a decentralized technology and it is next to impossible to hack into it. Due to this property, blockchain can secure digital IDs and also eliminate the nuisance of multiple passwords and bulky paperwork. Thus, it plays the role of an infallible watchman, protecting all of one’s private data.

Watch for Expanse’s own answer to identity management on the blockchain in the form of our Universal Know Your Customer ULYC) application currently in development.

 2. Revolutionizing the Gaming Industry

Apart from casinos, which have already stepped into creating digital wallets and even currencies for their customers, blockchain can be used generally in the gaming industry. 

 Many games have emerged which have been created by using the blockchain technology to produce digital and analog gaming experiences. A few examples of such gaming include BitPainting, CryptoKitties, and Chimaera. 

 3. Tool for Humanitarian Efforts

Yes, blockchain can be used for humanitarian purposes as well. One of the best examples of this use case is the World Food Programme’s (WFP) Building Blocks. The project was established in the year 2016; its major aim being using decentralized digital ledger technology for making cash transfers.

By January 2018, the program assisted more than 100,000 Syrians who had taken refuge in Pakistan and Jordan. It further aims at providing assistance to all the 500,000 WFP-supported refugees living in Jordan. 

 4. Solar Power Pool

In a recent use case, Siemens has partnered with a startup by the name of LO3 Energy using an application called Brooklyn Microgrid. The collaboration’s service is aimed at enabling the citizens of Brooklyn who own solar panels to transfer energy to others who need it. The entire transaction completely lies in the hands of consumers and the people who own the solar panels. 

 5. Selling and Buying Cannabis

Cannabis is an intoxicant. However, its health benefits have been known to people for years. For this very reason, cannabis trade is gaining acceleration in many parts of the world. 

There are two main benefits that blockchain could bring to the cannabis trade: transparency and anonymity. In the United States, cannabis trade recorded $9 billion in sales in the year 2017 with an estimated growth of $21 billion by 2021. These are ridiculously huge amounts and a cashless solution like blockchain can provide security to the business owners. Transactions can be tracked with greater ease and more transparency and accountability: something which traditional banking does not offer. 

6. Healthcare

Blockchain has a promising use case to offer the healthcare sector as well. There are several examples to prove this right, the first being that of Gem, a startup working with the Centre for Disease Control to store the data of a disease outbreak on the blockchain which could lead to effective measures for relief and response. 

 More examples include MedRec and SimplyVital Health. The first is a project taken up by MIT which deals with blockchain electronic medical records. The second keeps an eye on the progress of a patient after he/she is discharged and also provides decentralized health records of patients.

 7. Elections

Elections in nations face many problems in the present times. The biggest of these problems is that of voter frauds and dead voting. Also, it is necessary for a voter to be present physically during voting. This could lead to a decrease in the overall voter turnout because in many cases the voters might not be able to make an appearance physically. 

 Online voting has been avoided until now owing to security reasons. Blockchain, with security next to impossible to break, provides just the right way. Since hacking it is not possible, the votes can be registered on the blockchain. Moreover, it would also eliminate the problem of voter fraud by providing transparent records of the voters, which again could not be tampered with. 

Expanse’s VoteLock is an example of assisting the democratic ideology. 

 8. Deeds and Title Records

Title records are mostly maintained as paperwork. There are two problems this creates: first of all, having such massive records on paper is quite cumbersome. Secondly, the records thus maintained are vulnerable to fraudulent activities and can be tampered with. 

 The blockchain technology, decentralized, transparent and 100% secure could provide a valuable aid to the process of notarization. 

 Ubiquity is an enterprise which aids title companies, notaries and resellers.

 9. Music

With the help of blockchain, music artists can remove middlemen and can directly sell their music to their fans. Both Bitcoin and Ethereum support micropayments which can lay the base for a novel artist and fan relationship. 

 Several platforms are already working to reap the benefits of blockchain technology in the world of music. Examples include the Ethereum-based platform Choon and UJO. 

 10. Marriage

The last use case mentioned here is the most surprising and the most interesting of all. 

To combat the social bias for same-sex marriages, Swedish company Björn Borg has created Marriage Unblocked, a platform where couples can propose and marry on the blockchain irrespective of their sexual orientation. The records are anonymous and if one wants, one can obtain a certificate for the marriage too! The first traditional marriage recorded on the blockchain took place in Orlando, Florida Sunday, August 5, 2014 during a Bitcoin conference at Disney World in Orlando, Florida. 

 Parting Thoughts

This list is non-exhaustive. However, the few use cases which have been mentioned here all point out to the potential of changing the world for the better, a feature the blockchain technology carries in itself.

Blockchain and IoT—Two Innovations Merging into a Revolution

Jitendra Rathod, newsletter contributing editor, provides insights into the ongoing technological revolution that is underway via the Internet. 

Ever since humans have occupied the earth, centuries have been marked by inventions and innovations which have brought sweeping changes in the way we live and think. Going back to history, the fire was the first tool humankind used to arm, civilize and better its lifestyle. Since then, the wheels of science and technology have never stopped. Electricity was discovered, wireless communication was established, man invented televisions, airplanes, rockets, satellites, and the internet.

The last of these, as we have seen, is a technological revolution of the kind never witnessed before. It has changed the face of the earth and everything on it— it has seeped in our daily lives through and through. Today, we use it not only to the end of staying connected with the rest of the world but also for managing our tasks which previously involved cumbersome methods and processes. Coming to the latest, there are two technological innovations which have dominated our decade— the Blockchain and Internet of Things.

What is the Blockchain?

Simply defined, blockchain is a digital database containing information (such as records of financial transactions) that can be simultaneously used and shared within a large decentralized, publicly accessible network.

It is clear, even from this definition that decentralization is at the heart of this technology. This contains in itself the notion that blockchain is essentially, a peer-to-peer platform. It does not have central control over it and hence it cannot be manipulated. It naturally follows that the possibility of the presence of any third party is eliminated. Since it is a distributed ledger technology and encrypted from end to end, the data it holds cannot be tampered with.

Moreover, data can only be added to the blockchain in a time-sequential order. This attribute seals the fact that any data contained in the blockchain is rendered immutable. All of these characteristics go on to establish how successful an ally blockchain could prove to be to the Internet of Things.

What is the Internet of Things?

By definition, again, IoT is a computing concept that describes the idea of everyday physical objects being connected to the internet and being able to identify themselves to other devices. 

Now, it is to be made note of that traditional IoT systems are based on a centralized architecture. The devices thus connected send the information to the cloud (internet), which in its turn processes the data analytically and then sends it back to the IoT devices. IoT contains in itself the potential to connect billions of devices; which would inevitably come under the umbrella of a centralized system.

It is clear, therefore, that the present-day IoT systems are far from perfect. Devices share a lot of critical and important information to the internet. This makes it very vulnerable to hackers and thus poses significant data privacy and security risks. The most infamous of IoT attacks include Mirai botnet, which, in 2016, infected a huge number of IoT devices, taking down Etsy, GitHub, Netflix, Shopify, SoundCloud, Spotify, Twitter, and a number of other important websites; and the Brickerbot attack which simply killed the devices.

Moreover, based on a centralized network, IoT also runs the risk of single point failures when one nuance can damage the entire existing network.

These are the areas where the IoT is still struggling and this is exactly where blockchain can come to its aid.

Two Innovations Merging into a Revolution

It is commonly said that the whole is greater than the sum of its parts. This age-old adage cannot be more suitable for anything than the combination of blockchain and the Internet of Things. Indeed, the advantages of such a merger are many:

  • To begin with, blockchain is an encrypted ledger technology, which means that the data which is contained in it could be trusted by all the parties involved. It would be next to impossible to tamper with the information stored on a blockchain.
  • Smart contracts, a feature of some blockchain platforms like Ethereum, allows the creation of agreements which are executed only when certain conditions are met. This would not only make transactions easier and cheaper by the elimination of third parties but would also ensure that no individual can use the data for personal benefits. Cryptographic sharing of information shall cross out the risks of security breaches.
  • Blockchain shall lead to the betterment of the overall IoT security environment. It is to be noted that most of the data IoT deals with is very private and contains details of the lives of ordinary people. This data is made useful by getting shared with other machines and services. However, this also implies that it is prone to hackers which in turn means that individual privacy is put at risk. Blockchain shall provide a robust security system which shall be difficult to penetrate.
  • Lastly, blockchain shall help eliminate single-point failures which IoT runs the risk of. This would ensure that the IoT machinery runs without hindrance, hence making it more efficient.

Existing Blockchain-IoT Platforms

Steps have already been taken in the direction of merging the blockchain technology with IoT. Many platforms have emerged which understand the importance of such a combination:

  • HDAC: The Hyundai Digital Asset Company is making use of blockchain technology to enhance communication and data storage on the IoT devices.
  • Walton Chain: Walton Chain combines RFID and the blockchain for making IoT more efficient.
  • IOTA: IOTA is famously the first-ever platform to integrate blockchain into the Internet of Things.

These are just a few platforms which have adopted the revolutionary idea of combining blockchain and IoT. Other names that surface on this list include VeChain, Ambrosus, Power Ledger and Helium.

Parting Words

The applications of blockchain technology are enormous. The technology is akin to the discovery of electricity that fired up all the innovations that run on it. It is currently beyond our comprehension as to how blockchain technology may fire up other innovations. It is clear how blockchain could transform IoT and the combination can create something more secure, more efficient and more useful than the existing order.

Can Blockchain Win World Peace?

Jitendra Rathod, newsletter contributing editor, weighs in on the daunting impact Blockchain technology is positioning to have on the new world order. 

Every century has witnessed the development of a new technology which has changed the face of the world— from thermal power to electricity to the modern web. The technology of this century, which promises such revolutionary change is blockchain. It carries in itself the potential to impact and improve almost all the essential sectors which constitute a nation.

Perhaps the most vital and also the most unexplored territory which blockchain technology can influence is the peace at our borders. There are two sides to this. One is the changes that this technology can bring about in commerce and trade, which would eventually harbor world peace. The other is what blockchain can do as a technology other than its direct economic role.

‘Commerce as an Obstacle to War’

Thomas Watson, the former CEO of IBM, was of the opinion that commerce could be used to prevent nations from going to war against each other. He believed that financial interests and peace were mutually inclusive. So much so that he even had the slogan ‘World Peace Through World Trade’ written on IBM’s New World Headquarters in New York City.

In the present scenario, blockchain offers a solution— decentralization— which forms one of the core principles of the technology. This means the complete removal of a ‘middle-man’ or a ‘broker’ which includes any entity like a bank, a financial institution, or a government.

The global economic front is burning with trade wars. USA, China, Russia, and Iran are some of the key players. However, the entire global population bears the brunt of it when such economic policies result in inflation and other such crisis within countries which severely affects the buying power of the consumers.

At such times it is fair enough to assert that a need to replace fiat currencies with cryptocurrencies is felt deeply. While on the one hand, it can come as economic salvation for the general masses; on the other, it would give one less reason to the nations for initiating a war.

‘And the World Will be as One’

The USA has since long witnessed illegal immigration. According to data, in 2016, the total number of unauthorized immigrants amounted to 10.7 million, which constituted about 4% of the entire American population. Most of these unauthorized immigrants come from Mexico (about 52%); but data reveals that a considerable number of people get into the U.S. from Central America, South America, Asia, Caribbean, Europe, and Canada as well.

Moreover, the problem of illegal immigration is not only limited to the U.S., as countries like Canada, India, and the European nations face similar issues. While in some states, the unauthorized immigrants become, over a span of time, part of its economy; in other countries, they live either in deplorable conditions or are held in detention camps for years.

In such a situation, blockchain seems to be a better answer than a wall.

Blockchain technology can be used to maintain a digital record of the citizens in a country to keep a check on illegal infiltration at its borders. Digital currencies can further act as a tool for completely eradicating black money flow across the borders, stop the violence in these sensitive regions, and facilitate the fight against terrorism.

Other than this, blockchain technology can be utilized for various humanitarian causes. A perfect example is the World Food Programme’s (WFP) Building Blocks. This project was established in 2016, and it aimed to use decentralized digital ledger technology for making cash transfers. By January 2018, more than 100,000 Syrians who had taken refuge in Pakistan and Jordan availed WFP’s assistance. The blockchain-assisted project aims to provide provisions to all the 500,000 WFP-supported refugees in Jordan.

This is just one example. There are many other purposes which blockchain can serve. One worth mentioning is the conduction of fair elections by eliminating ‘death votes’ and other electoral fraud with the help of ledger technology for creating an infallible voting record system.

Parting Words: Understanding What Limits Blockchain Technology

The adage that everything can be good or bad depending on the intention with which it is used can be applied here too. While blockchain can have many humanitarian and progressive uses, it can also become a tool for oppression if used unchecked.

It is fair to conclude here that blockchain technology can not only give a leap to our economy but can also be used for establishing peace and order in the world when used by right hands for humanitarian and progressive goals. After all, what we choose to do with something as mundane as a stone- make a wall or a bridge- makes all the difference.

A Peek into the World of Cryptocurrency Miners

Here’s an article submitted by Jitendra Rathod, newsletter contributing editor.

Cryptocurrency transactions on the blockchain are similar to an intricately woven web. Since millions of transactions occur regularly around the world, the blockchain becomes a jumbled-up platform of inputted and outputted info. The first question which probably arises in the mind of a newbie to crypto is who manages this haphazard pool of extensive information regarding all the transactions? Who indeed.

Crypto Mining and Miners

Before unmasking the unnamed guardians of this particular task, one should first divulge in the actual process of transactions and their completions. The term coined for this process is ‘Mining.’ The procedure of mining comprises of verification and addition of various cryptocurrency transactions to the blockchain ledger.

It is conducted by professionals known as ‘Miners’ who are responsible for the authentication of information regarding a transaction and then uploading it to the blockchain platform. The process isn’t as easy as it sounds though since it involves solving complex mathematical algorithms and equations in order to get the transaction data. The task is, even more, trying due to the fact that crypto miners compete with each other, and the first one to achieve a solution is the one to collect the data regarding that particular transaction.

Since solving complex mathematical problems while competing with professionals isn’t everyone’s cup of tea, surely there must be some benefits that the miners receive for all this brainstorming. In fact, miners get paid simultaneously with their service. When miners break through a complex equation and then update the transaction data on the blockchain, they receive a set amount of crypto coins for the same. Through this, the miners earn digital currency with every transaction they process.

Equipment and Tactics

Crypto miners are not just all brains; there are some tools and tactics required for mining. There are particular hardware available, such as ASICs (Bitcoin Mining Hardware) which are high-specialization computers for the mining of that particular digital currency. Apart from unique equipment, miners also have the option to join a ‘Mining Pool.’

A mining pool can be considered as a local or native group of miners. By joining a pool, miners can pool in their resources, thereby increasing their chances of receiving blocks for disintegration and thus, can earn more money.

The kind of CPU or GPU utilized by the miners is also a crucial factor in mining. Apart from that, the most basic aspect that mining involves is the amount of electricity the task consumes. Hence most hardware utilized for mining are located at a place with low electricity cost.

This Coin, or That?

The process aside, how do the miners actually decide which coin to mine? There is a high probability of suffering losses while dealing in crypto, and the field of mining isn’t any different. Hence, the miners have to go through a basic checklist to decide whether a coin is advantageous for mining or not:

  • 1. Reliability of the Coin – Whether the coin is authentic or not is the first and foremost thing that a miner should confirm.
  • 2. The Price of the Coin – Does the coin which the miner has selected have a decent price and is it going to pay an amount worth the mining?
  • 3. Transactions Availability – The miner must choose a coin whose transactions are readily available.
  • 4. Competition in Mining – The miner should make sure that the assistance pay received for the transactions of the chosen currency is considerable as compared to the competition for the same.

Mining for Beginners

If one is planning to delve into crypto mining, then the best option is to first let someone else mine the coins. This type of mining is referred to as cloud mining and can be done on a contractual basis. Firms offering mining services for a year or more are in abundance, and the only requirement is to sign up an account on the party’s website. It is also an excellent way to earn a side income in the form of crypto coins.

If one wishes to indulge further, then they would need to set up an Application-Specific Integrated Circuit (ASIC or mining rig) hardware device which is exclusively developed for the process of mining cryptocurrencies. The next step is to download software for advanced mining and join a mining pool in order to receive not only rewards but support as well from fellow group members.

This brings us to the question of how profitable is it to mine EXP. Mining Expanse (EXP) has a high probability of receiving considerable benefits due to high transaction percentage of this coin. EXP has already seen an ATH of close to $10, and with a great community of developers and enthusiasts as well as many exciting projects in the pipeline, EXP may soon see its glory days. Those interested in mining EXP can join a mining pool.

The Digipool Expanse pool, for example, offers many benefits to members, such as:

  • 1. 0.5% fee
  • 2. PPLNS 3000
  • 3. 30 minutes payouts
  • 4. Nicehash support
  • 5. Support via Discord
  • 6. Dedicated and reliable hardware

Conclusion: Is there a Future in Mining?

Although there are inevitable ups and downs in crypto mining, it is still an evergreen process. All the currencies, be it Bitcoin or other altcoins are required to be mined for the completion of a transaction. There is a burgeoning concept of pre-mined currencies, but even if such options appear in the market, the traditional aspect of mining will remain since it prevents any frauds from occurring. Mining is getting a bit expensive due to hiking electricity rates at mining farms, such as in rural China, but it isn’t a business which would be off the market anytime soon.

How Big Data Can Usher in a Bankless Era

Here’s an article submitted by Jitendra Rathod, newsletter contributing editor, that takes the discussion from the last article forward. The previous article concluded with the suggestion that Big Data can help banks stay relevant in these times. Lets see how.

It’s difficult to imagine a world without banks. The traditional banking system has become so pervasive in our lives that we cannot think of a world where trade, businesses and even daily transactions can occur without a bank. While we may think of this scenario as improbable, we are actually part of a generation that is slowly moving away from banks.

Non-traditional players looking to become primary financial service providers

Imagine your transactions with Amazon, for instance. You fill in your AmazonPay wallet and pay for goods and services through it. If you are a Prime member, you get 2% cashback on all your purchases. You can pre-order experiences and goods before launch. You can basically do all this and more using your Amazon app, rather than your card or cash. Doesn’t it seem more like a bank account? If you are a merchant with a digital storefront, you can also add a button to your website that allows your customers to pay with their Amazon Balance and checkout using their Amazon account information. Where, in all of this, is the bank?

What is helping them? Big Data

There are other non-financial players that are looking to take you away from traditional banking, and with good reason. They started off either as an e-commerce store or a payment gateway solution, but as more and more people got attracted towards the unique experiences that these platforms provided, these platforms also started receiving a ton of data from their customers’ online behavior. This data – Big Data, as it is called – can be used extremely strategically to create unique and highly customized experiences for customers. And these players know how to leverage this personal data of customers to keep them loyal.

“Experience providers,” as I would call them, like Amazon, are gradually but surely encroaching upon the hallowed turf of banks. And they are doing this with the help of big data analytics. If traditional institutions do not leverage their customers’ data better, outside players will soon become primary providers of financial services.

The traditional banking system has been slow to embrace technological advancements. While there have been innovations in fintech, banks are often the slowest to accept them because they have been foolishly secure in the idea of their infallibility. Players like Amazon have proven that banking institutions are not indispensable and the onus is now on banks to fight for their turf against powerful contenders.

2 Billion Unbanked People in the World – An Opportunity?

Let me paint a different picture for you. Traditional banking has still not reached over 2 billion people in the world. That is roughly 25% of the global population, or 1 in every 4 people in the world. Most of these people live in the poor and developing nations of Africa and Asia. These people have always had a bitter-sweet relationship with banks. More bitter than sweet, I’d say. These people are not part of the global economy and do not have access to basic financial services. They still use cash for their daily transactions and cannot get loans from banks because of an absent credit history.

On the other hand, these are the same people who have access to mobile phones and thus, the internet. A case in point – while 80% of adults in Africa have no access to basic banking, 63% use mobile phones and while, on an average, only 27% people in South-East Asia have access to banks, it is the world’s fastest growing internet region. So what does all of this mean? It means that digital players like Facebook and Amazon have better access to this unbanked and un(der)served population than the banks. It means that whoever gets access to these unbanked peoples’ data can design products and services for them.

Parting thoughts

We’ve already seen how platforms like Amazon are attacking banks where it hurts the most – by attracting customers away from banks. Banks need to gear up for the battle of the century as they try to snatch their turf back and keep customers loyal to them. Which side leverages big data better is going to be the clear winner. But in this battle the ultimate winner is always going to be the end user – the customer, the attention of whom these players are fighting for. If non-traditional players win, we may actually witness a “bankless era.” It will be interesting to watch from the sidelines as two Goliaths battle it out for the ultimate prize.

Are We Witnessing the Death of the Bank?

Here’s an article submitted by Jitendra Rathod, newsletter contributing editor, that discusses his views about the future of banking.

If what we are witnessing continues, banks will slowly, and almost painfully, go down the path of extinction. I am not saying that banking will come to an end; I am only referring to the paraphernalia surrounding the banking system, especially the bank. Banks today have become vestiges of the traditional financial system and create more burden than value for the system.

Banks made hay, while the sun shined…

The previous generation, and a couple before it, witnessed the great banking revolution where, under the mandate of global financial institutions like the World Bank, banks endeavored to reach out to the smallest common denominator of the globe. The poorest, most impoverished, individual on the planet was approached systematically and brought within the financial mainstream. However, even after almost two decades inside the 21st Century and the traditional financial system has brought only 75% of the world’s population under the financial mainstream. Almost 1 in every 4 individuals do not have access to banks even today. However, let us pursue this line of thought later. Meanwhile, let us understand the problems plaguing the banks of today, with regards the present generation.

…but are they relevant anymore?

The “Millenials” are an extremely tech-savvy generation. The explosion of technological advancements, especially in internet and telephony have made the world a very small place. Even Baby Boomers and Gen X have caught on to the gadget-driven frenzy that is life as we see it today. These tech-savvy people are extremely picky in what they want and how they want it. Add to this the inherent curiosity of trying out new things and the impatience that has become the hallmark of these individuals and you have a recipe for either disaster or a revolution.

People today literally live their lives digitally. They wouldn’t want to get stranded on an island without their gadgets and a wi-fi connection. In such a scenario, the bank seems more like a vestige of the past, a mammoth trapped in the process of evolution to find itself among well-dressed humans in the middle of Times Square on a busy Monday morning. In a frenzied world a trip to the bank can seriously slow things down.

The services of banks today presents a classic case of expectations and frustration. While people want all banking services at their fingertips, the inability of banks to do so gives rise to frustration. And this frustration has been channelized by entrepreneurs to create revolutions and disruption in the financial sector. The marriage of finance and technology, also called fintech, has birthed technologies that aim to make banking as people want. But all this comes with a heavy price. The death of the “bank.” Banks – the structure, infrastructure and its countless employees – are simply untenable. Once the touchpoints to the financial system, they are now on their way to become redundant because touchpoints have shifted from banks to mobile apps.

Today’s generation wants banking to support their lifestyle and this new equation has no place for the bank. To say that banks have been innocent bystanders in their extinction by greater forces would be wrong. Banks themselves have played a major role in their own destruction. This brings us to our earlier discussion on unbanked people of the world.

Banks still haven’t reached 2 billion people

While banks had a clear mandate to bring all the people in the world under the financial mainstream, why do we still have 25% of the world’s population out of it? The reason behind this is the inability (?) of banks to serve such a large “risky” population. If an individual has a bank account, he will demand for a loan. A bank cannot give this individual a loan, because it is not sure if he can repay it. Such an individual does not have a credit history. But how can the individual have a credit history if he hasn’t been offered a loan and the eventual chance to repay it? It’s a vicious cycle and a classic case of what comes first – the egg or the hen.

This makes them prone to extinction

If banks want to continue existing, they have to get their act together. In my opinion, the question is not whether they would keep existing. Even by some miracle they do, they will not thrive, because the present generation is looking at players outside traditional finance to serve their needs. And these players are not only doing that, they are doing it with élan and exuberance, unlike banks.

But is there a way?

One way by which banks can stay relevant is by understanding their customers better. And the best way to do so is through leveraging information about their likes, dislikes, dreams, ambitions and aspirations. All of this can be obtained through their digital footprint. A curious piece of information says that more than half of the world’s unbanked population has access to mobile phones, even smartphones. And as we know, that a person’s smartphone knows him better than even himself. Using social media and other service-oriented sites can extract a lot of information about a person. While we can debate the legality and ethics of how the data is collected and used some other time, we can however appreciate the vital nature of this data and its importance in knowing the customer better so that a business or service provider can customize offerings to suit the lifestyle of the individual.

Parting words

Banking, as an institution, can stay relevant only if it leverages the information – Big Data – provided by their customers and also by getting access to such data from third parties. Banks however will slowly vanish to pave the way for a completely digital banking experience.         

How Expanse UKYC™ Mitigates the Risks of Personal Data Breaches on Crypto Exchanges

Here’s an article submitted by Jitendra Rathod, newsletter contributing editor, that discusses the challenges of the current KYC processes at crypto exchanges and how UKYC can help.

Cryptocurrencies have already hijacked the debate about the Fintech sector because of their unconventional and disruptive approaches to finance, which is also why they have been able to make their mark. Initially, at the inception of cryptocurrencies, the users’ anonymity had been at the heart of the technology and all the systems.

The anonymity was not merely a decision to set itself apart from the conventional financial systems; it was a well thought out ethical decision. The aim of this was to include the under-banked into the financial system.

However, this did not work out too well for the crypto community; and soon cryptocurrencies were alleged to be mediums of money laundering and tax evasion. They were also charged with facilitating funding for illegal activities of various kinds. It soon became clear that in order to be able to maintain the legitimacy of the cryptocurrencies, the community will have to compromise some of its fundamental principles.

This lack of transparency of the crypto-based transactions led the regulatory authorities in several countries to tighten the rules regarding the joining and usage of crypto-based services. The exchanges thus now have to acquire information from the users in accordance with the KYC (Know Your Customer), and AML (Anti Money Laundering) norms set by the regulators of the respective countries of function. It is in this respect that different services are coming up to cater to the needs of the crypto industry.

Challenges with KYC/AML

While this provided the much-needed transparency to the cryptocurrency transactions, it also saw some resistance from within the community. One significant complaint against the KYC norms is the question of privacy. This question is, in fact, multifaceted.

Firstly crypto transactions are based on blockchains, that is to say, they are based on public ledgers. As a result, each transaction is added to the master ledger. When the thread of the transaction is traced to the source and matched with the real life identity of the individual, it reveals sensitive transaction information. Initially the real life identity of an individual could not have been located but with KYC it is possible to reveal the identity of a person owning an account.

In simple terms, before KYC there was complete anonymity for the addresses on the ledger, but with KYC a simple breach of trust can reveal all sensitive transaction details. Thus, uploading specific sensitive information, like address, name, and sex to name a few can significantly put the privacy of the users at risk.

The second risk related to privacy is that the user uploading his or her information on the crypto exchanges risks losing data to hacking attacks. While thousands of users are on these platforms, it becomes the responsibility of the exchanges to manage and secure these data, which are highly valuable. For a user using many platforms it becomes even more risky, to upload such data over several platforms.

Moreover, the process of seeking and managing such vast amounts of data is expensive and time-consuming. On average, a traditional onboarding process in the brick and mortar financial institutions in general takes between 10 days to 2 weeks. Now, even though crypto exchange platforms are far swifter and efficient in this task, it is still somewhat of a hassle for them to deal with such huge amounts of data. Thus, not only is this a cumbersome activity for the user, but the exchanges themselves find these norms to be a burden. They often realize that such regulations are making their functioning a challenge.

The exchanges which continue to function from the highly regulated regions find it increasingly difficult to focus on their core operations and have to channelize a large chunk of their resources towards the management of such data. This reduces the quality of the products.

Problems with Existing KYC Processes

There are two major problems with the existing KYC processes on the various crypto platforms:

  1. Different KYC for different exchange platforms: currently, every exchange has its own KYC process. As a result, in order to join different platforms the user has to undergo the verification process over and over again. So if a person holds accounts in 10 different exchanges, he/she has to submit physical or scanned copies of documents at all these places.
  2. Risk to safety:Since, the user has no way of knowing how his/her personal information is being used or handled, there is a serious risk to privacy. She has no option but to trust that this data (her photo, a photo of her passport, for instance) will be safe in the hands of the exchange and will be used only for the purpose it is intended.

UKYC: The Expanse Solution

The Universal Know Your Customer module created by Expanse as part of the Tokenlab ecosystem, is one of its kind, for it can be used for all those platforms wherever it is necessary to validate the identity of the users. The user has to fulfill all the KYC requirements on this platform in the beginning, i.e., at the time of signing up.

Once the KYC requirements have been fulfilled, the user gets a personal profile. On this platform, each user’s profile is given a badge in the form of a barcode. It is a single unified badge which is valid for all the platforms and exchanges requiring KYC.

The bar code can be scanned every time the user needs to provide the KYC. The information remains stored at one point and can be accessed by different kinds of firms, thereby saving the user from the hassle of repeated KYC verifications. Moreover, as the profile information is in the form of a barcode, the user can secure anonymity to some extent.


In this day and age of discussions about the safety of personal data and providing the same data over and over again, UKYC comes across as a kind of savior. It also reduces the processing time of the data, and makes the process more accountable to the user, who now knows where her data is being stored. In this way, UKYC is an efficient approach to KYC. It can also have a significant effect in providing stability to the unregulated, or poorly regulated, crypto market.

Why is the Traditional Financial System Afraid of Cryptocurrencies?

Here’s another thought-provoking blog submitted by Jitendra Rathod, newsletter contributing editor.

First they ignore you, then they laugh at you, then they fight you, then you win.” Mahatma Gandhi said these famous words to describe how his unique strategy of non-violence that fired a nationalist movement, was perceived by the oppressive British Rule in India. He, however, had ultimate faith in his vision that eventually became instrumental in freeing India from the clutches of the British Raj that ruled over the Indian subcontinent for close to two centuries.

Are cryptocurrencies the present day David?

Time and again, these very words have been instrumental in defining a newcomer underdog that marches forward to challenge the monopolistic institutions, whether in culture, society or even in global economy. Today, the world is poised as it watches another such David take on the mighty Goliath. After centuries of financial hegemony, banks seem to have found their match in cryptocurrencies.

It was the very audacity with which banks, colluding with governments, behaved with peoples’ money, that fuelled the innovation we know today as Bitcoin. It was invented as a novel electronic peer-to-peer system of payment that would require no intermediaries, would be immutable, required no trust and had a decentralized, unregulated currency at its heart. Today, while the world is going gaga over the limitless opportunities and capabilities of cryptocurrencies, banks are losing sleep over the dwindling prospects of their own future.

Banks have played their part in demeriting crypto

While the world was coming to terms with the concept of cryptocurrencies, the banks were busy ignoring it, thinking that it was just a passing fad. However, when the price of Bitcoin started rising since the beginning of 2017 and exploded at the end of that year, banks and other financial institutions laughed cynically. It was a bubble waiting to burst, they said.

Spokespersons of reputed financial institutions around the world stuck their necks out to speak ill about cryptocurrencies, its various features and even the underlying technology. Yves Mersch, member of the European Central Bank’s executive board talked about the fact that bitcoin transactions took several hours to complete. “At these speeds, if you bought a bunch of tulips with bitcoin, they may well have wilted by the time the transaction was confirmed,” he said at an event in London. Mr. Mersch, however, conveniently forgot to mention how the current cross border transactions took 3-5 days to complete.

Augustin Carstens, head of the Bank for International Settlements described bitcoin as “a bubble, a Ponzi scheme and an environmental disaster.” Mr. Carstens probably forgot to mention that the traditional banking system was the biggest Ponzi scheme in human history.

Nouriel Roubini, American economist, has become notorious for being the biggest critic of the crypto phenomenon. He has called cryptocurrencies “the mother of all bubbles” favoured by “charlatans and swindlers.” He has said that the fundamental value of bitcoin is zero. Mr. Roubini seems to have forgotten that same is the case with the United States Dollar.

JP Morgan boss Jamie Dimon has called bitcoin a fraud “that would ultimately blow up.” A few months later, news surfaced that JP Morgan was considering a bitcoin futures product. Now this is hypocrisy of the worst kind.

In a news that came as a slap on the face of traditional financial institutions, the Polish central bank was found secretly funding anti-cryptocurrency campaigns on social media. It had paid famous polish Youtuber Marcin Dubiel more than $27,000 to create fake videos to discredit cryptocurrencies.

The Bank of Russia has called cryptocurrency a pyramid scheme. China has brought a blanket ban on cryptocurrencies. The Reserve Bank of India has asked all of the Indian banks to stop providing services to people who deal in cryptocurrencies, effectively sabotaging the people’s collective attempt to trade in a novel asset type.

But cryptocurrencies are ready for a long, drawn-out battle

We have seen the financial institutions’ attempts to laugh it out and now they trying to fight it out by choking off what is slowly becoming a mass movement. However, what banks do not realize is that the more they try to discourage people, the more people will see for what they truly are. The bank’s cynicism of cryptocurrencies is, ironically, adding fuel to the fire.

There is good reason for financial institutions to fear cryptocurrencies and some banks have been candid enough to admit it. the Bank of America recently said that cryptocurrencies posed a competitive threat to their business.

Why are banks afraid of crypto?

While banks have been harping about the risks of cryptocurrency being used for money laundering and other criminal activities, this submission is completely unfounded. Each transaction is immutably recorded on the blockchain that is accessible by public. Every account has been verified on a cryptocurrency exchange and if the law requires, the exchange can share all of the account details with the authorities. So where is the question of laundering money through cryptocurrencies?

Cryptocurrencies cut down the role of intermediaries and that’s where banks feel threatened. If people start saving in crypto, banks won’t have money to play around with. If people start buying things with crypto, banks won’t make money on debit and credit card fees.

Most importantly, cryptocurrencies are immune to the kind of manipulation you see with fiat currency. Look at the market crash of 2008 and you’ll realize what we’re talking about. It was a classic case of banks manipulating a system that was never transparent in the first place. Also, banks lend more than they have through a neat system called “fractional reserves.” But with crypto, there is no leveraging. Either you have it in your wallet, or you don’t.

Fiat money is prone to inflation. The banks and the government can print as much money as they wish thereby decreasing the value of existing circulating money. Bitcoin, on the other hand is capped at 21 million, so there is no risk of devaluation.

Finally, the state cannot steal your crypto assets. So, isn’t your fiat money safe in banks? Well, if that is what you believe, look at what Cyprus did during its 2013 financial crisis. All account holders who had 100,000 or more euros in their accounts had to lose a sizeable amount of their savings to save the Cypriot economy. You, however, don’t hold crypto in a bank. You hold it in your personal wallet and have access to them every moment of the day.

Parting thoughts

This is a battle that may well determine the future of money itself. For centuries we have been forced to use a medium for payment that has lost much of its backing and isn’t even worth the paper on which it is printed. It’s value is further undermined by the banks who hold them and the governments who print them. We, the people, are held at the mercy of traditional finance to revere a currency that has lost much of its value and charm.

The time is ripe for a revolution and cryptocurrencies are leading the charge. Financial institutions are fighting to survive and it looks like they are losing this all-important battle.