FINANCE
or inflated exchange rates, as travellers can exchange cryptocurrency for local currency with fewer intermediaries. At present, this can be done at cryptocurrency ATMs
or by physically trading with someone on the ground. A number of FinTech solution providers are rapidly emerging to help facilitate this. Bitspark is one such company, which offers 100,000 physical locations around the world for people to send and receive cash via blockchain technology. Digital currency exchange ventures can also be used by
M
ost people have heard of Bitcoin by now – the mysterious electronic currency created by “Satoshi Nakamoto”, a nom de plume for the inventor, or inventors, of Bitcoin. By creating Bitcoin, Nakamoto also invented
the concept of the blockchain: a database that is immutable, secured by advanced cryptography
(encryption and codes) and backed up with identical copies of information on a global network of computers. Tis network is not controlled by a single authority, and has so far proven impossible to hack. Te technology is complicated, but the concept is simple: blockchain is essentially a ledger or database that is open and decentralised, and allows for the creation of censorship- proof, secure, borderless, paperless currency that can’t be tampered with or changed. Bitcoin was the first, but it’s been followed by many others, referred to as “altcoins”, including Ethereum, Litecoin, Dash and Monero.
IMMUTABLE SYSTEM Security has always been a concern in the world of internet payment, but experts like Leonhard Weese, founder of the Bitcoin Association of Hong Kong, feel that it’s the conventional banking system that is insecure. “Credit cards are a bit of a mess from a security
perspective,” says Weese. “All the information you need to spend on a credit card is written on the card. Anyone who observes it can use it.” Te breakthrough of blockchain comes down to
“trustless-ness”, according to Clifford Choi, technical advisor at Emurgo, a blockchain venture fund and incubator. “You don’t own the data you give to Facebook,” says Choi, “you just have to trust them with it if you want to use their services. It’s the same for the money in your bank account, though most people don’t read the small print.” With a currency on a decentralised blockchain, such
as Bitcoin, there’s no need for trust in an institution – what the ledger shows is yours and you can store and spend it without the need for a bank.
NEW CURRENCY EXCHANGE For travellers, one immediate advantage of blockchain is currency exchange. Blockchain enables overseas transactions to be completed without paying bank fees
busine s s t r a ve lle r . c o m
Blockchains enable overseas transactions without paying bank fees or inflated exchange rates
businesses trading in Bitcoin to exchange the value into their home currency. Online travel agency Expedia has started to accept Bitcoin on this premise, using a company called Coinbase to exchange value from its Bitcoin transactions to fiat currency. Rafael Hauxley, author of Bitcoin vs Te 2018 Recession, who is currently shooting a Netflix documentary about the cryptocurrency’s impact on the world, says: “Te most obvious inconvenience of using fiat currency is how much money I lose converting from my home currency to local currency. Tere’s a reason that currency converters oſten sit in expensive tourist locations – they’re making money, hand over fist. By using BTMs [Bitcoin ATMs] and local Bitcoin sellers and buyers, I’ve oſten saved enough on fees to enjoy
a nice dinner or two.” Moving and accessing money via blockchain can
eliminate the woes of losing a bank card, having your account frozen while overseas, or having to travel with large bundles of cash. Weese also points out the benefits of blockchain could provide an outlet for the emergent middle classes and entrepreneurs in countries without a functioning banking system.
DAPPLICATIONS Blockchain is also poised to revolutionise “peer-to-peer” systems with more transparency and trust. “You can build apps like Airbnb and Uber [on the
blockchain], but we call them ‘dapps’ because they’re decentralised applications – there’s no central entity,” says Stewart Mackenzie, co-founder of Fractalide, which creates tools for non-technical users to build dapps. “Existing so-called ‘peer-to-peer’ services such as Uber
and Airbnb are not actually peer-to-peer. Tey’re extremely centralised – you pay a central entity, you use their servers, they control all the data so you need to trust them with everything; you need to trust that they haven’t manipulated the data, that they’re able to protect your information from hackers, that they’re not selling your data, and so on. “Centralised entities, like companies, are easy targets. You can lobby against them, as taxi unions and hotel groups have done. People who rely on Airbnb and Uber can suddenly find themselves without access to these services if they’re in a jurisdiction where the government decides to block
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