ColdFusion - Blockchain's Biggest Losers

Starting point is 00:00:00 You are watching Cold Fusion TV. Hi, welcome to another Cold Fusion video. This is the third video about blockchain on this channel and will most likely be the final one in the series. So again, this video is a collaboration between the Dubai World Trade Center for their future blockchain summit. So to recap, in the first video around six months ago, we looked at blockchain's origins and how it had a wider impact than just Bitcoin. And in the video last week, we saw how it's already starting to take hold in many corners of business and commerce. I think it will be beneficial to at least watch the last video to get up to speed. Today, we'll be taking a look at the biggest losers from the blockchain revolution.

Starting point is 00:00:45 Number one, middlemen. When a technology like blockchain or something similar is mature, basically anyone who profits from the current clearing and settlement mechanisms like those who process paperwork and transfer ownership may become a big loser. Beyond this, well-designed smart contracts may cause risk to intermediary organizations who provide clearing settlement and ownership services for profit. Supply chain managers may become a loser when it comes to blockchain. Tracking physical assets through changes in ownership and handling

Starting point is 00:01:14 can be recorded and communicated through data stored on the blockchain. This provides improved logistics visibility. Important events within the supply chain could be linked to automatic payments through the use of smart contracts. Blockchain also allows for transactions to be timestamped and finalized with a mathematically proven method for confirming any transaction transaction is valid. According to the CSIRO of Australia, companies who oversee such processes are at risk. David Uermak, Professor of Finance and Business Transformation at NYU School of Business,

Starting point is 00:01:45 sums up his views on blockchain. Quote, when you think of anyone who is keeping track of assets, I'd say their job is very much at risk because of this technology, end quote. He goes on to say that the jobs at risk include those involving tasks such as processing transactions and verifying documentation. Later Glyptus, a director at Sapient Global Markets, a capital and commodities market technology consultancy, has a similar view. Quote, the first area that would be hit would be any reconciliation or post-reconciliation activities. You just wouldn't need it, end quote. In an interview with the Financial Times, she does give a ray of hope, quote, I can see a whole class of professions around encryption and identity protection, even though some jobs will disappear, we're acquiring needs

Starting point is 00:02:29 we've never had before around things more valuable than they've ever been before." End quote. Number two. Banks. Sort of. Earlier on in the proliferation of blockchain, it was thought that banks were going to be major losers. But now it seems that they're taking blockchain in their stride.

Starting point is 00:02:46 They're trying to become the disruptor not to get disrupted. This is being done through the creation of private blockchains, which I admit I'm not particularly thrilled about. In September of 2016, Barclays carried out the world's first trade, trade, trade. transaction using blockchain. They cut a process that normally takes seven to 10 days down to less than four hours. Since then, plenty of blockchain banking projects have come up. This includes IBM's hyperledger fabric, the utility settlement coin, and R3 to name a few. In fact, today, around 80% of banks are developing their own blockchain technology. In this environment of using blockchain to facilitate

Starting point is 00:03:24 transactions, individuals working in clearinghouses as well as stockbrokers may be under threat if this trend continues. In the larger picture, banks will lose some business from those who want to send money directly to each other outside the traditional banking system using cryptocurrencies. So I think it's a balance. It seems like some people in the financial sector will be losers, but there will be overall gains within the sector. Number three, the negligent everyday investor. If you're out to make a quick buck in blockchain technology, but you haven't done your research, you might be in for a nasty surprise. Initial coin offerings or I-Syser, ICOs are a new form of crowdfunding, sort of like a large-scale Kickstarter or Indiegogo campaign,

Starting point is 00:04:05 but for blockchain and cryptocurrency applications. Due to the lack of regulation, ICO scams and deceit are commonplace. The last major scam occurred in Vietnam, where an ICO claim that participants could get a guaranteed 40% return on their money, monthly. Sound too good to be true? Well, it was. Eventually, the company decided to run off with $660 million. Another case was the famous BitConnor. next scam.

Starting point is 00:04:30 Hey, hey, hey, hey, what's so, what's, what so, what so, what so, so, some people who said that this was going to be a corner artist game, that this was going to be a scammer game. Hey, you're going to lose all your money? My wife still doesn't believe in me. Like the Vietnamese ICO, BitConnect guaranteed set returns on the investment, but this time from a mysterious AI that traded the Bitcoin market. When the scam was revealed, hundreds of thousands of people lost a whole bunch of money,

Starting point is 00:05:19 and some lost everything. Companies like this give a really bad name to the blockchain investment space. So does this mean all ICOs are bad? No, of course not. There are some great projects out there, but you just have to be discerning. You can think of it like the IPOs during the dot-com era. There are a whole bunch of companies that were raising a lot of money that didn't really do all that much.

Starting point is 00:05:40 But the good ones, like Google and Amazon, weather the storm and actually became massively profitable companies. Here's some tips to stay safe, courtesy of medium. 1. Read the ICAWR, white paper thoroughly, does the concept make sense to you? Number two, what problem is the product solving? Does it make business sense? Number three, study the team and their experience. Dig into their history. Check out LinkedIn profiles and previous jobs. Number four, check forums to gain

Starting point is 00:06:09 insight into what the cryptocurrency community is saying about the project. Number five, take a look at what rating companies are saying about the ICO. If a new project isn't rated, there's a high chance that it's a scam. So we're almost at the end of the video but I just wanted to touch on something. In the last video there was a lot of people talking about the environmental effects of the blockchain mainly because of the excessive amount of energy used. So this is true in some cases but only for certain types of blockchain like the one that Bitcoin uses. Other newer blockchains use something called a proof of stake method whereas Bitcoin uses a proof of work method. The proof of stake method allows for

Starting point is 00:06:45 far less energy consumption and there's no monetary incentive for mining. So this means that there's no holding of graphic cards driving up the price. That's just a little note that I wanted to mention. Thanks for watching. That's the end of this video. I hope to be doing some live streaming on this channel at the future blockchain summit in Dubai. This has been Degogo. You've been watching Cold Fusion and I'll see you again soon for the next video. Cheers guys. Have a good one.

ColdFusion - Blockchain's Biggest Losers

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