Welcome to our comprehensive interview series – Humans of Blockchain ™ where we get the best in the business to answer a diverse set of questions.
This series will clear the air of doubt in the blockchain space today by focusing on bringing more transparency to the readers.
Our guest, today, Joe Duncan – Fintech Advisor, Angel Investor, Wall Street Vet is an experienced personality in the Fintech Industry and has some insightful opinions about the Financial aspects of the Industry.
Not wasting much time, let’s hear it out from Joe himself.
1. We would love to know more about you, Joe. Your Journey and how you got into the blockchain/ fintech space.
I was exposed to Bitcoin early on as a result of having spent a fair amount of time in Southeast Asia over the past decade. In many countries there you do have a lot of “unbanked”, more than 75% in the Philippines for example, unlike the U.S. where nearly all households have access to a bank account. So you have a real use-case in those unbanked regions just strictly as an electronic payment means. I saw first hand how someone who was locked out of the banking system due to their account balance being too low to justify a bank’s audit and compliance cost, could use Bitcoin to have at least some access to an international payments system at a reasonable cost.
In my opinion, what happened at the end of 2017 was quite calamitous — when fees for moving Bitcoin were on par with other unbanked alternatives like cross-border money transfer agents, but settlement times were even longer. Price was signalling that there was something special there and enticing people to try it, but their initial experience turned out very badly. I don’t see many of them coming back due to lack of trust. When they return, it will be in the form of a different entity or user-interface with a distributed ledger on the back-end. They may not know they’re using crypto, just recognize it’s something that’s working better. Seeing these users let down like this first hand also made an impression on me; that scale is important. There is a perception out there that you can separate scale from the user experience. I don’t agree — they, of course, are inter-related.
2. Your profile indicates a strong background in the Financial/ Banking Industry. What are your thoughts on Blockchain being a disruptive technology for the Financial Industry?
It is happening, just look at the announcement from JPMorgan about launching its own coin. Doesn’t surprise me at all. People outside don’t realize that banks — however slow or dinosaurish they may seem — they’re actually alpha predators. This is not Amazon versus Sears in the ’90s; Sears didn’t realize it was a technology company, banks have known this all along. Decades before Amazon, they were replacing tellers with robot ATMs, for example. When the time is right they will move into the space, and aggressively so. Up until this point they’ve made more money off keeping old technology in place (after all they’ve spent decades figuring that out), and also the blockchain technology wasn’t quite ready either. Both are changing now.
JPMorgan coin, I know the criticisms of it being a “walled garden”, but I think it’s great. Any large incumbent, especially as brand sensitive as JPMorgan, will, of course, enter with its own aptly named product first. Will it succeed or succumb to open public chains, or social media platforms like Facebook who are rumoured to be working on their own coin like WeChat Pay, but held on a distributed ledger? We’ll see. It’s a great sign it happened as it’s a required next step, consumers will be the ultimate winners.
3. What would be the financial shortcomings in the Blockchain segment according to your views?
Scale, scale, scale … some don’t want to hear that, but they need to. Someone will figure this out, and those getting traction now will be the winners. I know there’s a notion that scale is at odds with security, but I think this line of reasoning is quite often taken too far. Rather than an unquantified number of validator nodes needed to be “truly decentralized”, I think the better way to approach it is to ask what is the minimum number of competitive validators needed to secure a network to provide it with the core benefits of permissionless, censorship-resistant, immutable, and ultra-low cost? We’re at the stage where enterprises are adopting — they won’t do it for philosophical reasons. Your blockchain solution must stand up to the traditional cost and comparative analysis they go thru to determine if onboarding produces a positive ROI and when: robustness, fault tolerance, resilience, transactions per second, interoperability, etc. That last characteristic “interoperability” is not to be taken lightly. There are hints in the announcements and interviews from JPMorgan like “ … so anything that currently exists in the world, as that moves onto the blockchain … the applications are frankly quite endless …“, that point to it being not just a portal between “walled gardens” but ultimately open public blockchains as well, at least for the data in some form.
4. We also see that you are a Senior Advisor to multiple companies/ projects. Could you throw some light towards your Advisory roles?
I tend to involve myself in situations where a company has a real product or core capability, perhaps in need of some refinement where I can help, and then providing them with required access and traction with end users in the financial space — buy or sell-side — to get to the next level and beyond. Roughly speaking a Series A type company. Provided it’s FinTech related, I will consider it; I have been deeply involved in both AI and DLT projects.
5. What do you see the year 2019 holding for Blockchain projects? Any ending remarks for the industry, Joe?
Yes, it’s over-exposed right now. Bet you didn’t see that coming! I think there’s a lot of angst over whether or not it will succeed, and people want to keep talking about it. It will because the market wants it to. There’s a great quote I first heard from George Soros: “markets don’t predict the future, they create it.” We’re seeing that now with what, upwards of a hundred billion in US dollars committed to blockchain if you added up all the public and private investments, and implementations taking place at large enterprise? It doesn’t have to be this way, but it will because the market is applying the necessary resources to make it happen. Call it “financial brute force” if you will, but it’s a question of “how” not “if” at this point. Blockchains will be the best they can be, and will form the core “truth” in the system, working collaboratively with real-time bandwidth delivery and data analytics to enable greater efficiencies in all sorts of functional requirements like KYC, AML, credit scoring, payment, and settlement, audit, and tax. The global financial system overall will be far less expensive to use, and thus less exclusionary.
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