Bitcoin (BTC) was born 11 years ago, and ever since, there has been much hype over this killer technology and the ways it can revolutionise various aspects of our lives.
So far, we’ve seen people trading BTC, turn their physical assets into digital, watched numerous startup businesses create their own forms of Cryptocurrency – often to sell on as a way to fund projects without diluting their owners shareholdings – and heard the rumours swirling around how big banks and businesses plan to adopt Cryptocurrencies.
Yet, for every Crypto evangelist and reported use case, there are many doubters. Since its conception, all aspects of Cryptocurrency have been heavily poured over and scrutinised: the concept, the technology behind it, the potential it has to assist criminal activity, and what exactly its ultimate purpose is.
To a certain extent, the scepticism is valid. In its 11 years of existence, Cryptocurrencies have experienced bad publicity, limited creativity or use outside mainstream financial sectors or big business, and ultimately, hardly appears a killer mass application in sight.
However, to dismiss Cryptocurrencies and its technology, and to write off its potential at this stage is, in my opinion, a mistake. Cryptocurrencies offer many advantages, including security, relative speed when processing transactions, community benefits not previously available, and ultimately, better ways to do things and solve problems.
What is needed, is the application of creative thinking around exactly how this technology can be used to benefit communities and solve some of the biggest problems facing us today. Here are just two examples of the ways this currently being done by two businesses.
Helping Generation Rent
Obtaining approval for a mortgage has always been a challenge for renters. This is particularly the case when their main outgoing is their rent, and there is no acceptable way to record rental payments to count towards a credit rating.
To help solve this, one business – in partnership with a credit reference agency – is using Blockchain. Verified registered users (such as tenants and landlords) record rental payments using the technology (provided by the business) to record their rental payments. Once verified using secure and virtually tamper-proof technology, the payment is acknowledged by the reference agency as part of the tenant’s credit history, and can be used for future credit applications, including mortgages.
Not only does this benefit the tenants, it helps landlords establish a reputation as good landlords, and opens the buying market up to more buyers.
Providing Up and Coming Artists with a Platform to Sell
It can take years for an artist to gain the recognition needed to support themselves through their work. With many forced to take up second jobs, this leaves little time to devote to their craft, which in turn makes their chances of recognition even slimmer.
One business has come up with a novel solution to help solve this problem using Blockchain type technology. They have established their own Cryptocurrency, which has its value measured against a portfolio of paintings.
The portfolio consists of works from up-and-coming artists, who have talent, but are not yet widely known and need to sell more pieces in order to establish themselves. Often, these artists have little time to spend on networking and require support in getting their work seen by potential buyers.
The business helps these artists to establish themselves by buying their work for a combination of traditional currency and the Cryptocurrency, and then exhibits the work for resale. When these works are sold, funds are reinvested in expanding the portfolio behind the Cryptocurrency.
This way the artist has the opportunity to sell more work than they would if they had not taken part payment in the Cryptocurrency. They also get help in establishing themselves as artists, as more of their paintings are in commercial circulation, and the value of their Cryptocurrency increases with each sale and reinvestment into the portfolio.
What’s next for Cryptocurrency?
Ultimately, Blockchain type technologies and Cryptocurrencies are what you make of them, whether you are a small business, a large business or a consumer end user.
Whilst they have historically received bad press – with some, but by no means total justification – it should be remembered that they exist not to solve every and all problems, but rather, provide us with viable opportunities to find better, more efficient ways of doing things.
It is just a question of using your imagination.
Martin Donoghue is a corporate and commercial lawyer with a strong technology-focused client base. He has advised on many applications of Blockchain type technology and Cryptocurrencies to businesses of all sizes, and has amassed many war stories in the process. If you have an idea or just want a general chat about the legal issues of using tech in business, he is more than happy to talk.