Over the past year big name companies like Walmart have announced an interest in blockchains. The reason why some of the bigger brands got involved is due to the ability of blockchains to enable users to share information and to conduct transactions freely, quickly and in a secure way. A further advantage is these transactions can be performed under anonymity and without fear of that information being altered undetected.
Although this technology instills a level of trust among users, in order to effectively carry out a transaction blockchains must consist of smart contracts. These are programs that allow two parties to set the terms of the agreement and self-execute when these terms are met. For this, they need oracles (external data feeds), which are not easy to create.
To help make this happen and to accelerate greater use, bitcoin and blockchain expert and founder of the Bitcoin Center NYC, Nick Spanos, is working to improve transparency. By developing technology to ensure the secure creation of oracles, which will bring the existing wealth of global data to one place for all user to access, Spanos hopes to see a big boost to bitcoin transparency.
To understand how this works and what the future impact is likely to be, Digital Journal spoke with Nick Spanos.
Digital Journal: Nick, how common is the use of Bitcoin becoming?
Nick Spanos: On Friday, November 3rd 2017, “bitcoin” was the most searched phrase in the Apple App Store. In the same week, popular Bitcoin wallet/exchange company Coinbase signed up over 100,000 new users in a single day.
DJ: Who are the main users of Bitcoin?
Spanos: While Bitcoin was originally adopted by Libertarians and those who do not want government interference in currency, today the users of Bitcoin are a more diverse group. Everyone from plumbers and school teachers to programmers and bankers are buying Bitcoin.
In Japan and Korea, Bitcoin is already mainstream. From mom and pop shops to big businesses, it is common to accept it as payment, and the momentum that it has gathered in Asia is already starting to spread to the western world. In fact, Japan recently declared Bitcoin a legal form of currency. In Venezuela, there are people who are risking their lives to own Bitcoin, which is not surprising.
DJ: Is the user of Bitcoin spinning over to bigger and established brands?
Spanos: Absolutely — there are some large brands that are already accepting Bitcoin, such as Overstock, Dell, Newegg, DISH, Microsoft, Intuit, Paypal, as well as many others.
Businesses accepting Bitcoin as payment isn’t as exciting as the number of banks and hedge funds releasing reports about their interest in holding Bitcoin and other cryptocurrencies. Bitcoin may be commonly referred to as “digital currency,” but it is also a store of value, more akin to an easily divisible and transferable “gold with wings.”
DJ: What are the advantages for businesses using Bitcoin?
Spanos: Firstly, it is much, much quicker to send money via Bitcoin, as opposed to bank transfers. Wiring money from bank to bank can sometimes take more than a week. With Bitcoin, the same amount can be transferred in minutes.
Additionally, international customers and b2b transactions are much smoother with Bitcoin. It avoids foreign exchange fees and the delays associated with international money transfers. When transacting with customers or paying freelancers that live in countries that common payment methods (e.g. PayPal) don’t support, Bitcoin is a way to safely send and receive payments.
Unlike credit card companies, which will take one to four percent of a payment in fees, Bitcoin transfers have a flat fee that is paid by the sender. There are no chargebacks with Bitcoin. Once the transaction is finalized (approximately 10-20 minutes), the receiver can be sure they have the money.
Finally, companies can accept Bitcoin payments without ever worrying about the details of Bitcoin itself: Bitcoin Merchant Payment Processors (e.g. Coinbase, BitPay) will provide a checkout page and accept the Bitcoin on behalf of the merchant and instantly convert the Bitcoin to cash at the time of sale, typically wiring the money the next day to the business.
DJ: What benefits do blockchains bring and is security the main attraction for using blockchains?
Spanos: Blockchains are about decentralization. Decentralization removes middlemen and makes systems more resilient compared to centralized versions.
The decentralized security of the blockchain is what makes it attractive. The ability to securely transact and keep records without a trusted third party means there are considerably less fees and two parties that don’t necessarily trust each other can still transact because they have trust in the security of the blockchain.
DJ: How do bitcoins and blockchains come together in ways that incentivize users?
Spanos:Blockchain is the technology that powers Bitcoin. They are inseparable.
DJ: What is the role of Zap? What types of things are you working on?
Spanos: Zap is a platform to enhance the usability and functionality of smart contracts. Smart contracts, which are essentially programs that run on the blockchain, are the primary focus of the $36 billion dollar Ethereum blockchain, which is currently the 2nd largest cryptocurrency.
Zap is an open marketplace that is poised to be the user facing marketplace that will be used by developers to create smart contracts and Decentralized Applications (Dapps) that are integrated with data from the off-chain world. We are the user facing application for buying and selling data, that is easily integrated into smart contracts and Dapps.
DJ: What services does Zap offer?
Spanos: We allow our users to buy and sell data that is easily integrated into smart contracts.
DJ: What other developments in technology do you think will be commonplace in five years’ time?
Spanos: I’d say virtual and augmented reality; machine learning and deep learning; neuromorphic hardware; IoT proliferation and robotics.
Nick Spanos is CEO of Zap and bitcoin and blockchain expert and founder of the Bitcoin Center NYC.