Is there a buzzier word than blockchain?
Attempting to cleave hype from hope and reality from the headlines, PYMNTS’ Karen Webster spoke with Michael Ting, SVP of Digital Markets for Hyperwallet, to move beyond the buzz.
The first step in separating fact from fiction: defining blockchain.
Ting offered his own take, stating that “the simplest and broadest way to describe it is really a way for any two parties to exchange anything in digital form with absolute certainty and with a guarantee.”
So, yes, one thing is for certain: Certainty.
“The certainty ‘piece’ is foundational in a trusted environment where two people know each other. There’s no problem if the transaction falls apart. If I know you, then I’ll call you back up and ask you to resubmit [a request], but in an entirely anonymous environment, it is absolutely essential. You really have one shot to make that transaction happen. And if it doesn’t happen, there’s no guarantee that [it] is ever going to happen,” said Ting.
Beyond that stated premise of certainty, understanding goes by the wayside, and industry participants and observers alike start to cobble together their own versions of what blockchain is and does.
Those terms run the gamut of speed, transparency, immutability and verifiability — words that are bandied about to describe the attributes of blockchain technology. But most analyses, said Ting, do “a poor job stitching those attributes together in a logical way that people understand [through] real-world applications.”
Webster noted there’s a marked difference between blockchain processing rails tied to bitcoin and blockchain tech used beyond mere facilitation of crypto-transactions.
Yet, said Ting, “That‘s one of the things most of us are still battling with — people conflating blockchain with bitcoin or cryptocurrencies. Cryptocurrencies really are just part of a single use case of the blockchain technology. The technology itself clearly has benefits that extend beyond just exchanging value.”
When it comes to payments, said Ting, the system is complicated enough to keep a wholehearted embrace of blockchain an eventuality, but no quick event.
“There are a lot of moving pieces and stakeholders that have to come to the table in order for a payment transaction to happen successfully. So, for payments to become … mainstream for blockchain, there still is some room to [grow],” he said.
Other industries have been quicker to realize the value of blockchain utilization, where intellectual property, through artists and authors and musicians, said Ting, are developing solutions to help the more disenfranchised groups of smaller artists claim ownership of their work and get paid accordingly and more transparently.
He also pointed out that banks are developing their own versions of blockchain for internal use. One overarching theme and use case that stands out, said the executive, ties in with digital identity, where usernames and passwords fall away in the face of a single authoritative record of who is who.
For Hyperwallet, said Ting, “We can recognize in theory and ideologically how it benefits a business like ours and our clients. But we’re in the business of mass payments, which means that we’re touching a lot of people, and it’s a massive responsibility where [we] have to make sure that everything goes right.” At the moment, blockchain seems more experimental and bears monitoring.
And here’s the rub: As new use cases emerge and as the mainstream is inundated with breathless news of new ventures touting blockchain, is it all hindering adoption and an understanding of what blockchain can actually do?
“We have to remember that consumers don’t use these technologies directly,” Ting told Webster. “We use products and services that employ those technologies, and those products and services are run by companies and service providers.”
“Getting these companies and the service providers to adopt these new technologies — no matter how well these technologies are working — takes time,” he continued. “You have to look at it over a timeline. In the early days of the constant news cycle … it was helpful in driving awareness and education. But I think we’ve sort of eclipsed that point now where people are either cynical or are confused by what blockchain is” amid such saturation.
To boost adoption, said Ting, companies must do a better job creating the right user interface. “The really great companies are going to be the ones that allow that technology to sort of run in the background of their products and services,” he said, noting that companies like IBM have created a framework for other companies and application developers to use the layer that they’ve created to get their applications to users — rather than trying to build directly on the blockchain from the ground up.
“A lot of people have referred to blockchain as the internet of value,” he told Webster. “They compare it to what [the] internet has done in terms of communication. But we tend to forget that none of us actually use the internet directly. We use it through our account-based relationships with ISP and email providers and the countless applications. So, in order for blockchain technology to be more mainstream, there has to be this ecosystem of participants that are doing a better job at allowing us to tap into that technology.”