Blockchain technology is on the rise, and Bitcoin payments are marginalized

In 2015 , people began to gradually shift from the field of Bitcoin payment to the underlying Bitcoin protocol blockchain technology. There is no doubt that 2015 is just the beginning of blockchain technology, and 2016 may become the explosive period of blockchain technology.

Technology Trends

We don’t need to spend too much time on technology, as we can see a lot of open technology: open financial services technology APIs and blockchain technology being developed all year round (whether it is a specific period evolution of Bitcoin or not).

Big data and cybersecurity will attract more investment from mainstream financial institutions. (Yes, blockchain will attract more such investment institutions).

The ECB will pay more attention to consumer identity verification (SCA) technology and gradually marginalize biometric technology.

Apple pioneered biometrics, but in the mass market biometrics is a user technology rather than a security technology. It will be a huge success and will continue to be so. So, I hope that biometrics in payments in the mass consumer market will have a qualitative leap.

Business applications of blockchain

When it comes to business, we can see a general trend.

If you break down the revenue of European banks, you will find that all their businesses are under pressure. Therefore, we can find some business models and profit points from them, and blockchain can play a greater role.

The payment market is not limited to banks. Non-financial institutions and financial institutions also have a certain market share in the payment market , among which financial institutions are particularly prominent.

Financial institutions provide services to customers like a bank, but in reality financial institutions are not banks. They take a specific niche in the market. Holvi and Moven are the best examples.

When you think of non-financial institutions, you think of Google, Facebook, Amazon, etc.

Large chain conglomerates have yet to really enter this market (Starbucks being an exception), but as retailers focus on connecting with their customers, they are likely to enter this space and have a profound impact.

If blockchain technology is going to lead to revolutionary change, it will be by changing the dishwasher rather than overthrowing the Federal Reserve.

Social field

First, the current aging population is a prominent feature. I recently saw a project involving facial recognition technology. You can run the banking app on your phone , then look at the phone you want to log in, and then you are automatically logged in. This has proved to be very popular. Millennials may prefer fingerprint recognition technology. But the elderly are more likely to forget passwords and PINs . This technology is not just for children.

Secondly, the squeezed middle class has to get up at 7:50 in the morning to go to work. They work very hard and have very little free time. This market is also very broad, and blockchain can solve many of the problems.

Finally, for millennials, we have to build payments into the tools they use and make them disappear.

In the Venmo world, a Facebook Messenger payment plays the same role as ChasePay or Walmart Pay or Samsung Pay or any other payment method.

Government Regulation

In the world of payments, they are by far the most important trends. But regulation is essential. Here are two important regulatory trends that the blockchain world needs to pay close attention to.

The first one people started calling it “ real-time payments ” . In the UK, Faster Payments (FPS) has been established and has been a huge success. The more representative ones are Pingit and Paym . There are more companies entering this space.

Other countries in the world are also starting to do this, but the biggest exception is often the United States, because the Federal Reserve has no regulatory authority over banks' real-time payment systems. Therefore, we always think that the instant payment system appeared earlier in the United States.

In fact, there has been a lot of news about this in the past few months. The Clearing House (TCH) is developing VocaLink , Dwolla is trying to develop an API , and NACHA started to act on the same day.

Although real-time payments won’t be available in the U.S. until next year, once people can use this method to transfer funds to one another, Bitcoin will have to work hard to find a niche in the payments market for the typical customer.

The second is Europe’s Payment Services Directive PSD2 . This requires banks to open APIs to third parties in 2018. The EBA has defined three categories of APIs :

Mandatory Payment API : Requires all banks to implement supervision of third-party payments, including direct access to account information and related activities by third-party payments.

Optional Payment API : Banks will be able to offer some special services such as trade finance and foreign exchange.

The third is the non-mandatory unpaid API .

If European blockchain entrepreneurs want to find an opportunity, they should not only focus on payment, but also on the added value of payment and the related basic services of payment. Blockchain entrepreneurs should pay more attention to non-mandatory non-payment APIs . Blockchain entrepreneurs can use these APIs to create new services, such as bank acceptance and expansion services. Among them, identity authentication and authentication management will be the focus. In 2016 , more companies will pay attention to this field.