By David Drake
The need to encourage responsible innovation in the cryptocurrency space has received a huge boost. Ripple, a cryptocurrency and payments start-up has committed $50 million to a research program called the University Blockchain Research Initiative. The program has already partnered with 17 universities across the world to facilitate research and development in cryptocurrency, blockchain and digital payments.
Additionally, Binance, the world largest cryptocurrency exchange in terms of daily trade volumes, has committed $1 billion to fund start-ups in the cryptocurrency space. The funds will be available to start-ups that will be focusing on stable digital currency, security token platforms, decentralised exchanges and custodial solutions.
For many players in the cryptocurrency space, these investments are strategic and will impact the future of blockchain positively.
Bank52 CEO and co-founder, Thomas Labenbacher says, “Any investment in blockchain technology or cryptocurrency projects is an investment in the future. We can already see that digitization will change banking, blockchain will revolutionize the banking industry, and cryptocurrencies will eventually replace existing financial systems by eliminating intermediaries.”
The impact of these investments is expected to be evident and widespread. Tom Vivian, CEO and co-founder of dStadia feels the investments made by Ripple and Binance will be instrumental in accelerating blockchain adoption because with time, the technology will replace back office functions and facilitate speedy transactions businesses.
He says, “Blockchain is set to replace most corporate back office functions, because using it you can complete many previously outsourced back office services for near zero marginal cost. Initiatives like those of Ripple and Binance accelerate human adoption of 3rd Industrial Revolution, which is about cooperating, sharing and adding value back in for the benefit of all your systems participants, to near zero marginal cost technologies and that is a great thing for the entire human race and they deserve to be commended for these initiatives.”
On his part, Tristan Chaudhry, CEO at Fry Egg feels research is the foundation of any technology and investment made towards it will drive growth and mainstream adoption of blockchain technology around the world.
He says, “The initiatives announced by Binance and Ripple will help to drive mainstream adoption of blockchain technology, and will also encourage growth of cryptocurrency into new and uncharted territories. Research is the foundation of any new technology or industry and it is something that the blockchain space lacks. By investing in the next generation of human capital, companies like Ripple and Binance are paving the pathway for the masses to better understand and adopt blockchain technologies. I look forward to seeing blockchain and cryptocurrency evolve from a cutting-edge concept understood by few, to a necessary technology used by billions of people around the world.”
Even with the research and impact financing taking center stage, standardization of information flow still needs to happen. According to Reginald Ringgold, founder of BlockVest Decentralized Exchange and Index Fund, there is need for better standardization before banks and traders can rely on the Distributed Ledger Technology (DLT).
“In the best case, blockchains and other digital platforms should do for the global value chain what shipping containers did for the physical transportation of goods. Just as the standardized dimensions of containers allowed them to move around the world easily from ship to rail to truck, DLT with data standards and interoperability ought to create seamless flows of value, Blockchains and smart contracts can fix capital market inefficiencies and slash the costs of derivatives trading, but two years since such promises came in vogue, a foundational issue has yet to be ironed out. Before banks and traders can rely on a distributed ledger technology as the vaunted ‘single record of truth’, there first needs to be better standardization,” he says.
Emphasizing on the need to focus on the information environment, Andrei Huseu, CEO at Wealthman says, “As for the adoption of blockchain, it is necessary to focus initiatives on an information environment in which blockchain projects grow, instead of projects’ development itself. If announced initiatives work for legislative initiatives, events, the development of independent media which support idea of decentralized registry and on an independent internet-based satellite data transmission, then they would succeed in getting a broader adoption of blockchain.”
Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.