Louis Vuitton, Paypal & JP Morgan: Blockchain disrupts 2019 in big ways

More than ten years ago, a certain “Satoshi Nakamoto” released the whitepaper Bitcoin: A Peer to Peer Electronic Cash System. The paper simply described the digital currency as how it was defined in that title. For how Bitcoin has since been disrupting the financial industry, the paper was surprisingly only 10-pages long.

Nearly eleven years passed and Satoshi Nakamoto continues to be anonymous. Some believe that name is actually a pseudonym of the group of individuals who developed the technology. Whatever or whoever is behind that name, he or they was one of the world’s 50 richest people as of 2017. Satoshi Nakamoto was estimated to be worth $19.4 billion and he or they would have been the 44th richest person in the world according to the Forbes rich list.

While the paper was primarily the launching point of the highly controversial digital currency, interest has always been on blockchain technology that runs Bitcoin.

What is Blockchain?

Don & Alex Tapscott, authors of Blockchain Revolution, described the technology as “an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”

All data are stored in “blocks” and are bound to each other using “chains” of cryptographic technology. These data are overseen by a number of computers or run by a number of servers which made them available to anyone who knows how to access cloud storage or archival applications.

The whole concept means that data processed by blockchain technology is transparent and could not be owned by anybody, any organization, not even by the government. It is essentially the embodiment of democracy. Perhaps this is why initially, many big financial players are questioning the security and legitimacy of blockchain and many are generally hesitant to embrace the technology fully.

Many of the companies that are first to bravely utilize and take advantage of blockchain are small startups. Usually, they offer big companies their services to be able to accept digital currencies.

For example, Florida-based CLIC Technology offers brick-and-mortar merchants a platform to safely process transactions which are paid with cryptocurrencies. While most big companies are in the process of deciding whether to implement blockchain technology, companies like CLIC Technology offer big retailers the means to maximize the advantages of the technology. It new apps, CLICPay, and CLIC Wallet are expected to roll out in the US in 2019 and in Canada, Japan, Australia, and the UK in 2020.

As more startups continue to devour the market share, the most recent years saw more and more major financial players recognizing the potential of the previously shunned away technology.

Blockchain technology as a disruptive force

Over the last decades, doubts on the legitimacy of Bitcoin linger. As it turned out, major players in the financial sector and tech sector, which used to be the strongest critics of cryptocurrency, have been testing blockchain technology.

For one, blockchain is a priority topic at Davos this year. A survey conducted by the World Economic Forum found that 10 percent of the worldwide GDP will be managed on blockchain by 2027. This was because many governments have recently looked into the possibilities of blockchain in the last two years. In that period, Google search results about blockchain reached 3.7 million. There were also almost 500,000 new publications in the same period.

The survey also found that venture-capital funding for blockchain reached $1 billion in 2017 alone. Investments in initial coin offerings, sales of cryptocurrency had peaked to $5 billion. Big tech players are also joining in with IBM investing more than $200 million in blockchain to power its Internet of Things capability.

Barclays, Royal Bank of Scotland Group, and Clifford Chance

In April, these three were among the 40 companies that tested blockchain software developed by R3 for Instant Property Network. The platform can simplify the process of buying a house for customers from months to weeks since it eliminates third parties such as agents and other middlemen.

“When a person wants to purchase a house, the process encompasses a whole host of different interactions with different businesses and governmental entities that can be uncomfortable and drawn out,” said John Stecher, head of the group innovation office at Barclays in New York.

Central Banks start Implementing Blockchain Technology

Also in April, a new white paper published by the World Economic Forum found that central banks around the world have actually started implementing blockchain and distributed ledger technology or DLT. The findings perhaps could be considered the most significant display of how blockchain is disrupting the financial sector. For one, central banks are the guardians, so to speak, of the country’s monetary policy, and financial and economic stability. Among central banks already implementing blockchain are those located in South Africa, Canada, Japan, Thailand, Saudi Arabia, Singapore, Cambodia. Interestingly, the World Bank, as it turned out, surprisingly, launched the first blockchain-based bond in August 2018.

PayPal invests in Cambridge Blockchain

The month of April also saw Paypal invests in Cambridge Blockchain, a startup that promises to provide people a way to own their online identities without having to register in any social media platform, like Facebook. Although the online money transfer company had reportedly filed a patent in March 2018 for an app which could speed up cryptocurrency transaction rates, the April investment was the first time the company truly spent for a blockchain initiative.

Louis Vuitton plans to use blockchain

Louis Vuitton, under its parent company LVMH, has been reportedly preparing to use blockchain in its operation. An unconfirmed report said the luxury brand will use the blockchain to monitor and track the movements of its authentic goods. The project, which is purportedly code-named AURA, is expected to eliminate the possibility of making fake versions of its merchandise. The said app will also be used by Parfums Christian Dior according to the report. After initial rollout in May or June, the app will also be integrated to the more than 60 luxury brands under LVMH, the report said. According to the report, AURA was developed by the same people behind studio ConsenSys and Microsoft Azure. All parties concerned refused to give comments.

JPMorgan Chase and its JPM Coin

In February, JPMorgan Chase, the US’ largest bank, has announced that it is launching its own cryptocurrency, the JPM Coin. The said currency was designed to have a fixed value which can be redeemed for $1. Unlike Bitcoin and other pioneer digital cryptocurrencies, JPM Coin will not trade for free. The bank believed that with its own currency, there will be reduced risks and transaction costs for their institutional clients.

With its move, JPMorgan claimed to be the first American bank to successfully venture into digital cryptocurrency. The move was also a complete pivot from JPMorgan CEO Jamie Dimon which some years ago said Bitcoin is a fraud and that people trading it are “stupid.”

Louis Vuitton, Paypal & JP Morgan: Blockchain disrupts 2019 in big ways was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.