Digital currencies are still continuing to sweep the world and establish new financial paradigms for our changing lives. There is no doubt that the future of money lies in this new, decentralized ledger-based system.
So what happens when centralized giants like Visa and Mastercard start adopting parts of this technology in an attempt to stay relevant? The answers may surprise you.
While they aren’t likely to, or expected to, become fully open, transparent and decentralized overnight – signs point to significant changes in these tech-driven titans of commerce that may be a major step forward for blockchain technologies.
Make no mistake, neither company have much faith in cryptocurrencies so it’s unlikely we will see a mineable “visa coin” or anything similar unless it functions as a new rewards program of sorts. However, there is little question of the significant role of blockchain in the very near future and both of these companies know that.
While most of like to think of blockchain as the champion of the people against corporate entities like these, it is not hard to see the appeal this same technology has for them. They would be protected from fraud both internally and externally and in effect create a system that works better for everyone in theory.
There are still questions and challenges such as what will motivate individuals to participate on their blockchain and just how decentralized, if at all, will the network be? I feel confident that these questions are being addressed and the challenges will be solved through trial-and-error over the next few years.
Visa Blockchain Research
Visa was a major supporter a study last year at Cambridge University called the “Global Blockchain Benchmarking Study”, that looked at emerging payment and finance trends and had surprising results on the use of cryptocurrencies at the institutional level. It only makes sense for them to turn their attention to blockchain as they are well aware of the future promise these technologies hold and they aren’t going to be left out.
However, it does not look like some corporate takeover of crypto-technologies. This is a necessary phase of change that will lead to even better versions of what these companies are.
Take Visa for instance – they have been in existence for 60 years and have only been a public company for 10. Before that, they were a bank-owned entity and the process of transferring everything was long and arduous. Since then Visa has made strides in what it offers its customers and keeping up with shifting trends. Blockchain was the obvious next step and I am excited to see how it will progress.
Mastercard Blockchain Patents
Mastercard has even claimed that the blockchain they have developed could actually run the entire company. Which is a huge step in automation which would ultimately save the company large amounts of money that can be used as capital for further innovation.
There have been successful attempts at small-scale businesses such as rental cars, Airbnb, and others that have run entirely on blockchain and required little to no employees. If that were possible with corporate giants such as MasterCard, we could see a drastically different way of doing business with one another emerge rather rapidly.
Another benefit of having companies such as Mastercard and Visa developing their own blockchain solutions is their resources. While most blockchain developers tend to be small teams in need of financial support from investors, these credit card companies have nearly endless funds to dedicate to new innovation.
This is exciting because of the many well-known challenges that currently exist in blockchain technology and the potential for them to be solved even faster. MasterСard has filed several patents in this area including one for a blockchain scaling solution that also speeds up node activation!
Now, of course, it is a patent. Which means it won’t be open source. At least not right away. If Elon Musk and Tesla’s example of releasing all patents means anything, we may see an end to patents before long as well but that is for another article. Even if the solution isn’t published at least it’s real. Which means it is not only possible but can be replicated!
The blockchain is the future, as well as the decentralized nature of the technology. Companies like Visa and Mastercard are going to do everything they can to keep the control in their hands but I have faith that in time it will develop to resemble something much more open, inclusive and mutually beneficial for the companies, their customers and the financial landscape of the next decade!
Cryptocurrencies are here to stay. Executives of Visa and Mastercard can scoff and speculate all they want. The fact remains that the day they too begin to offer and complete transactions in various digital currencies are not far off.
It isn’t difficult to imagine existing credit and debit card companies at the very least developing cards for use with crypto wallets and point of sale units which can accommodate various other ways of accepting payments.
Creating easier financial transactions are the ultimate goals of these businesses and the primary reason they exist in the first place. They should be eager to integrate new technologies even if they do challenge the current paradigms. It is what is best for everyone. They will adapt as always, and those companies that don’t – those holdouts and outliers – will fade into obscurity.