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Despite hundreds of articles being written and discussions being had on this subject, can anyone truly say that they understand everything about blockchain, Bitcoin and Ethereum? I spoke to Loi Luu, co-founder and CEO of KyberNetwork, a decentralized exchange that allows for the instant trading and conversion of any cryptocurrency. I asked this renowned cryptocurrency, smart contract security and distributed consensus algorithm researcher the questions most regularly asked about blockchain, as well as its impact on the fintech industry.
Madhvi Mavadiya: In layman’s terms, how would you describe blockchain’s impact on the fintech industry?
Loi Luu: Revolutionary, because it takes away the middleman to attain the same purposes in transactions. Traditionally, middlemen such as banks and other forms of financial institutions are needed to ensure that a payment goes through. However, these middlemen cost money, and as a result payment transactions becomes unnecessarily inefficient, bloated and expensive. Additionally, having middle men introduces potential security risks and financial fraud.
Blockchain improves the efficiency of a transaction by eliminating the middlemen, and as a result we could have a more efficient payment system, reducing the cost of money transfer for everyone. Blockchain also makes things more transparent and easily auditable by any third party.
Mavadiya: How would you describe Ethereum’s impact on fintech?
Loi: Ethereum is the first generic blockchain platform that allows users to easily create and deploy their decentralized and trustless applications. It has created incredible opportunities in the fintech space. Its creation and adoption has allowed a new form of innovation that will power greater efficiency in the sector.
As an example, one can build an app to facilitate cross border money remittance that costs a fraction of the current charges, which ultimately benefits senders with lower transaction cost and the recipient with more amount received. Micropayments are also something exclusively enabled by Ethereum and Blockchains, in general, and allow people to pay tiny payments (e.g a fraction of a cent) frequently. For example, users can pay a few cent for every hour that they watch Netflix or some premium YouTube videos.
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