Expect use of blockchain, the digital record-keeping system, to become generalized this year in banks and elsewhere.
BUENOS AIRES — Last year was a decisive one for blockchain and the cryptographic space in the world. We saw the birth of new alliances and the first interbank blockchain transactions. Bitcoin and Ethereum survived a bear market. And Facebook launched Libra in hopes of recovering this year from its 2019 setbacks.
In the depths of the ocean of the chain of blocks, there are landmarks like the first cross-frontier payments between the central banks of Canada and Singapore, registered in 2019, and China's initiation in billions of U.S. dollars' worth of investment in crypto-innovations. We know that this year China will launch its central bank for digital money.
By nature the industry most inclined to adopt blockchain is finance, as the technology is essentially based on the transactional model. This sector needs to start functioning digitally in a secure, confidential and transparent manner. Blockchain assures this as security and transparency are integral to its very nature.
In Argentina, conditions are set for the financial sector to briskly advance toward adopting the blockchain infrastructure, as its best technological response to a need to make operations more cost-effective, and ultimately for inclusion. Notably, Argentina has already included blockchain on the national innovation table, and the first interbank transactions involving the technology took place in 2019.
This solution allows citizens to be given points for paying taxes on time, recycling, or using municipal bicycles.
Beyond finances, blockchain can potentially add value to asymmetrical information situations or where there is insufficient trust. Examples of its applicability include traceability industries, digital signatures between parties and certification procedures. These are all processes where an unchangeable register of transactions is of particular importance, especially when particular payments need to be found. The ability to program smart contracts inside transaction flows is for many organizations a tool to optimize their operations, while for entities like NGOs, its value is in bringing transparency.
Last year also gave us the the first cryptocurrency wallet of digital assets for the district of Marcos Paz in the Buenos Aires province. This solution allows citizens to be given points for paying taxes on time, recycling, attending pet sterilization events or using municipal bicycles, among other civic actions. People can the spend those points on products in shops registered with the program, or else use them as tax credits.
The tokenization of juridical processes is also close. This will allow faster and more efficient administration of normative frameworks through networks connecting smart contracts, archives storage, messaging, payment channels, lateral chains, oracles and more. The year 2020 will see a considerable number of essential infrastructure elements.
*The author is a co-founder of Koibanx, a blockchain development firm.