How to Build Blockchain Financial Services Applications

Are you a start-up founder or an enterprise leader with plans to launch a financial services application? You might be wondering whether, and indeed, how to use blockchain for this.

Industry observers highlight the steady growth of blockchain in the financial services market.

A Markets and Markets report states that the FinTech blockchain market will grow from $0.23 billion in 2017 to $6.2882 billion by 2023. The report projects a CAGR of 75.9% during the 2018-2023 period.

You are no doubt wondering how to build blockchain financial services applications?  Find out how, HERE.

 

Building better blockchains is surprisingly hard

According to its fans, crypto is the key to paradise, particularly the financial kind. Greedy intermediaries, such as banks, will be replaced by smart contracts (self-executing rules) that run on blockchains (distributed databases). This will give rise to efficient and innovative financial services, collectively called “decentralized finance” (DeFi).

The foundations of this structure are shaky, however. Today’s blockchains may be masterworks of coding, but they are also fiendishly complex, energy-hungry and, perhaps counterintuitively, centralized. Despite years of work, crypto developers are still trying to fully overcome the trade-offs inherent in the technology. 

Read the the full article in The Economist HERE.

What Does a 'Layer 2 Blockchain' Mean?

Since Satoshi Nakamoto released the Bitcoin whitepaper in 2008, blockchains have continued to gain popularity.

People have applied blockchain technology to other areas, besides payments, thanks to its decentralised and secure nature.

Scalability is what Ethereum founder, Vitalik Buterin, calls a component of the "blockchain trilemma."

Buterin's thesis explains that no blockchain network can equally provide decentralisation, security, and scalability. They must sacrifice certain elements to achieve near-optimal functionality.

Bitcoin and Ethereum trade off scalability for security and decentralisation for scalability. That explains why a major blockchain network like Bitcoin can process around 7 transactions per second. For context, Visa's payments system can process up to 24,000 transactions per second.

If blockchain technology must attract more users, it must solve the scalability problem. Several solutions have appeared in recent years, including the now-popular “layer 2” protocols.

Click HERE to find out what layer 2 blockchain means, how it works, and why it’s important for blockchain adoption.

DeFi - Definancializing Productive Activity

As software and hardware engineers around the world are untangling the centralization of the internet, a vocal portion within the enclave of blockchain-based solutions - generally referred to as decentralized finance - or DeFi for short - has emerged. While blockchains provide the building blocks for reliable information and - to a lesser extend value - transport functions - a layer of middleware to the larger concept of cryptographic primitives mapped by protocols, current developments are largely focused on digitally native assets, and their derivatives.

You can read the full article HERE.

A Visual Guide to Profile Picture NFTs

How do you represent yourself on social media? For most people it’s a selfie, a photo with their friends, or a picture of their pet—but what about a digitally-created character?

Profile picture NFTs are pieces of digital artwork that people use to express themselves online. Each item is a depiction of a character’s face, and has a unique mix of attributes that gives it a sense of collectability.

Like other NFTs, they’re secured on a blockchain and can be bought and sold for cryptocurrency. And while there’s nothing to stop you from screenshotting an NFT and using it for your own profile, the market for these items continues to grow.

To learn more, check out this infographic HERE. It explains how three well-known profile picture NFT collections were created.

Watch Crypto expert explain the Blockchain to Congress

At a congressional hearing on crytpocurrency, Bitfury CEO Brian Brooks explains the blockchain and how it plays an integral role in Web 3.0.

 

Soaring NFT sales redraw the art market - FT Film

The market for non-fungible tokens, or NFTs, is soaring, reaching $10.7bn in the third quarter of 2021. For the art world it's a new frontier, where ownership of digital assets is encrypted on the blockchain. The FT talks to artists, auction houses and collectors about how NFTs are bringing in new buyers and setting records for sales of digital works, and we follow a painter making his first NFT.

 

DeFi: Crypto’s ‘Wild West’ of Finance - WSJ

Many are calling decentralized finance, or DeFi, the “Wild West of finance.” This fast-growing industry aims to provide automated banking services for cryptocurrencies to everyone, with no middle men. But DeFi is still in its early stages, which means there are risks. 

 

Visa is working on a universal payment channel

Visa is working on a universal payment channel project that connects blockchain networks to a variety of cryptocurrencies, stablecoins and central bank digital currencies (CBDCs).

The payments giant’s research and product teams are working on a universal payment channel (UPC) initiative, which is a blockchain interoperability hub that connects blockchain networks and allows for transfers of digital assets.

Get the details HERE.

Using CBDCs for enhanced cross-border payments

Cross-border payments are usually criticized for high cost, low speed, limited availability to households and businesses and insufficient transparency, but recent technological advances could help mitigate those issues, according to a Bank for International Settlement report.

The report, entitled "Central bank digital currencies for cross-border payments," was published in collaboration with the International Monetary Fund and the World Bank’s committee on payments and market infrastructures.  It was prepared for the G20 group of nations' forum.

Get more information and access the full report HERE. 

Non Fungible Tokens - a comprehensive overview

NFTs are the current buzzword. The word NFT stands for non-fungible token, which means a unique, irreplaceable cryptographic object.

The purpose of NFTs is to manage ownership of digital content (digital collectible items) by storing the ownership in the form of a digital certificate on a blockchain (usually on the Ethereum blockchain, but other blockchains can also be used). In this manner the buyer can prove that he is the owner of a certain digital item.

Find out more by reading Joris Lochy's "NFTs - A hype or a lasting new investment asset class?"

CBDC and Cryptocurrencies are NOT the same

As millions of people start to take an interest in the world of crypto, it is important to understand the difference between a Central Bank Digital Currency (CBDC) and a Cryptocurrency like Bitcoin.

The growth of cryptocurrencies like Bitcoin and Ethereum has led to a greater interest in the technology behind these currencies from startups, individuals and governments alike.

There are many pros and cons to the CBDC economy. Jumping to conclusions based on incomplete understanding of the CBDC world is rife, especially since misinformation abounds and not much has been made public about the launch of the CBDCs by some of the economic giants in the world. 

Find out what these differences are in Arti Agarwal's article "Why CBDCs Are NOT The Same as Cryptocurrencies Like Bitcoin" HERE.

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Is the rush to CBDCs just a fad driven by FOMO?

U.S. Federal Reserve Vice Chair for Supervision Randal K. Quarles called the global rush to roll out central bank digital currencies (CBDC) akin to the 1980s parachute pants fad and FOMO, or the “fear of missing out.”

He was speaking at  the 113th Annual Utah Bankers Association Convention, Sun Valley, Idaho.

He drew a parallel to the world’s knee-jerk infatuation with digital currencies.

“Before we get carried away with the novelty, I think we need to subject the promises of a CBDC to a careful critical analysis,” he said in his remarks.

You can read his full speech "Parachute Pants and Central Bank Money" HERE.

Other comments from PYMNTS.com HERE.

CBDCs and the opportunities for the monetary system

Central bank digital currencies (CBDCs) offer in digital form the unique advantages of central bank money: settlement finality, liquidity and integrity. CBDCs are an advanced representation of money for the digital age and the digital economy.

Digital money should be designed with the public interest in mind. Like the latest generation of instant retail payment systems, retail CBDCs could ensure open payment platforms and a competitive level playing field that is conducive to innovation.

The BIS, in its Annual Report, to be published later today, has a full chapter on central bank digital currencies. Read the full chapter HERE.

 

Non-Fungible Tokens (NFT) – A good investment or a setup for fraud?

"The “best” part of the NFT market craze is that it appeals to non-technical people who don’t understand what they are buying but desperately want it to work." writes Tim Sloane, VP, Payments Innovation at Mercator Advisory Group.

Read full article HERE.

Non-Fungible Tokens - Asset or Scam?

Photographers, filmmakers, and digital artists are falling over themselves to mint NFTs in a get-rich-quick scheme that will do little beyond transferring wealth from artists to tech billionaires.

Why are so many people buying into the idea that something is rare because everyone says it is?

Get the lowdown in this article - NFTs Are a Pyramid Scheme and People Are Already Losing Money

What are NFTs and Crypto Art?

NFTs have been taking off over the last few months with Artists like Beeple blazing the way for digital artists to make a ton of money selling their work. But what the heck is crypto art and how does this all work and can you you take advantage of this new blockchain art world.

Fintech's World

The fintech industry welcomed multi-billion dollar investments in 2019. Where is the most growth, and how are incumbents dealing with digital disruption?

Since the introduction of the first credit card with a magnetic stripe in 1966, financial technology has come a long way. Silicon Valley may not have birthed the term “fintech”, but it has certainly helped catapult its applications into the mainstream.

Leveraging everything from basic apps to the blockchain, the changing dynamics of fintech are creating new investment opportunities every day, growing its appetite with every new megadeal.

Check out the graphic which highlights the global growth of the fintech industry, the services with the most staying power, and major M&A developments of the past year as traditional institutions scramble to deal with this digital disruption.

Read more HERE

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