Using blockchain as a trustless network to trade and exchange goods and services represented as a cryptocurrency opens up all kinds of opportunities for people who wants to exchange. Anything can be represented in a cryptocurrency, and new markets that cannot efficiently run today, will pop up using this new technology. Second-hand markets where people exchange artwork as noted above, or cars, or houses, even the rightful heirs of your savings would be able to access what you leave behind using virtual assets as the bank vault.
Speaking of bank vaults and cryptocurrency, the banking sector is facing massive issues keeping up with their regulation and staying compliant with Know Your Customer (KYC) and Anti Money Laundering (AML) rules. Blockchain and cryptocurrency provides a solution to that. The problem faced by banks boils down to ancient technology, most often with bank’s records running on mainframe systems that dates back to the 60s. With increasingly complex rules and data regulation, these systems can’t keep up. The problem is aggravated by these systems being siloed databases that rarely share customer information, raising the risk for banks – large and small – stifling basic operations and delighting no one.
At present, the KYC and AML infrastructure mirrors guidelines implemented by centralized financial enterprises around the world. Just as traditional financial institutions require due diligence on prospective customers, cryptocurrency companies also rely on KYC and AML to collect personally identifiable information on individuals before allowing them to create new cryptocurrency wallets, do peer-to-peer lending, remit money across borders, or buy or sell cryptocurrency on an exchange. In the event a crime is committed, this information can be used to accurately pinpoint an offender and take appropriate action where necessary.
Through strong cryptography and by introducing decentralization, it’s possible to create protocol-level cryptocurrency rails to dramatically improve the handling of KYC and AML from a privacy and security perspective — all while reducing the cost of verification and clearing the barriers to mass adoption of cryptocurrencies and blockchain. On the blockchain – because of the way information is shared on a distributed ledger system, an archive of records, if you will – any and all information placed on it is secure, transparent and immutable.
A customer’s background, financial records, source of income, wealth and assets can only be placed on a blockchain once there is consensus across the whole network that all the information is accurate. It is extremely difficult for any false information to be submitted for this reason, and because each data entry is cryptographically hashed, it is very difficult to tamper with the information once it is verified and put on the blockchain. At the same time, personal information stored on a blockchain will naturally need to be GDPR compliant, which is discussed in this article.
Blockchain is not the regulatory minefield often being portrayed, rather it can be an asset in the regulatory armoury. Blockchain technology mitigates data ambiguity and reduces the potential for fraud. If all banks are on the blockchain, KYC and AML data can be shared across financial institutions in a manner that is secure, transparent and seamless. Further, immutability is a defining aspect of blockchain and one that paves the way for new levels of trust. With each unique KYC profile, there can be an auditable trail of activity that no-one is able to change or corrupt, not even bank employees. Moreover, the decentralized nature of distributed ledger technology — even in a private network — removes the risks associated with having single, central points of failure, thereby protecting data from hacks and other cyber-attacks.
For banks, the benefits are myriad: greater security, consistency and operational efficiency; increased interoperability between institutions; an end to costly, time-consuming duplication of data-gathering, data-processing and data verification; and, ultimately, enhanced regulatory compliance. For regulators, meanwhile, blockchain makes data on customer activity more visible and more reliable. And for the hard-pressed customer, blockchain-based KYC systems reduce on-boarding times and increase confidence in financial service providers. If we want to avoid scandals in banking that are borne of poor implementation of regulations — or worse, deliberate criminal activity — then blockchain provides an answer that governments and regulators would be unwise to ignore.
Beyond the banking sector, the real kicker for blockchain to push commerce into the future, is when large established players adopt this technology. Amazon and Google have already implemented blockchain in their cloud service offerings, and they are toying with the idea of letting customers issue virtual assets in the form of cryptocurrency. It will be exciting to follow these developments which will let consumers exchange virtually anything as long as it is put on a blockchain.
There has been a craze around crypto recently leaving many to dive into trading and exchanging different cryptocurrencies. While Blockbasis sees cryptocurrency as an alternative to fiat currency and the existing financial system that presents a viable way to transfer value for payments of goods and services, we understand that cryptocurrency is still at the early stage of this revolution.
We originally set out to allow users to transfer cryptocurrency from one user to another instantly and for free, similar to the way PayPal allows users to transfer digital fiat currency. The number one feedback from our loyal users was to allow trading, so users not only could transfer crypto for free, but also exchange their coins in real time. This is why we introduced a decentralised exchange on Blockbasis using Bitshares’ well-documented and open-source DEX, not a centralised exchange.
With a decentralised trading feature added, users will have access to a greater variety of coins and will be able to exchange coins instantaneously on the DEX. As always, we welcome feedback so we can continue to make improvements for our users.
You asked, we listened!
Blockbasis wants to make blockchain and cryptocurrency available for the masses and easy to use. Facebook is a common tool for connecting and communicating, which is also why we decided from the beginning to implement our login and customer service features on top of a familiar service, like Facebook.
Shortly after launching, it became clear that the number one feature the growing Blockbasis user base requested was logging in with email instead of Facebook.
As a consequence, we have now added the option for logging into your Blockbasis account using an email address and password. The Facebook login remains for users who prefer to login with their Facebook profile.
With the growing concern about privacy and the right to be forgotten, regardless if you sign up on Blockbasis with your email account or Facebook, one thing is sure.. the only information we store at Blockbasis is your email address in order to facilitate transactions between users.
For more information, visit “Why do I login with Facebook or email?”
Blockbasis has officially launched the first version of the web platform, making cryptocurrency available to the masses by allowing users to send and receive cryptocurrency with just an email or phone number.
The problem we face with cryptocurrency is boiled down to a few barriers:
- Hard to use (what is a public key? what is a private key?)
- Expensive (transaction fees)
- Slow (transaction time)
VISA is able to process 56,000 transactions per second while the most successful cryptocurrency, Bitcoin, can process 3-4 transactions per second, and the second-largest cryptocurrency, Ethereum, can process 20 transactions per second! At the same time, transaction fees are skyrocketing, approaching $30 USD to send any amount of Bitcoin! That sure doesn’t sound like a step forward.
This is why services need to be built on top of these decentralised currencies, otherwise they will never stand a chance against the fiat-based currencies issued by central banks, a system that has been optimized for centuries. It’s David and Goliath, and David is about to get warmed up.
Blockbasis is launching with an audacious roadmap, but laying the foundation by launching the following services today:
- Storage: Keep your coins safely stored with Blockbasis
- Deposit: Deposit your coins from any other wallet to Blockbasis
- Transfer: Send and receive any cryptocurrency amount to other Blockbasis users for free
- Withdraw: Withdraw any amount of coins on your balance to another wallet
We look forward to see how the initial feedback from the community is, and we are excited to roll out the next features as stated in the whitepaper, to make cryptocurrency available for the masses!
In the meantime, we encourage you to look through our discussion posts to contribute to our community and share your thoughts and opinions as well as explore our support section if you have any questions regarding digital currencies, blockchain, or creating an account on Blockbasis.