Bitcoin.com's 2015 FinTech and Blockchain Review

2015 has shown that financial technology is going places. The new disruptive patterns of technology are bringing finance to a whole new level. With data analysis, blockchain technology, social media apps, and peer-to-peer lending, the game of who shapes the digital revolution the most is heating up.

Also read: Mobility Meets Self-Driving Cars and Blockchain Technology

The global importance of FinTech and the distributed ledger protocol brings forth a new era of how we look at media of exchange. It’s a wide cross-section of economic distribution that gives inclusion to the digital consumer.

The consumer group Nielsen reports that digital lives are currently “wholly intertwined” with a customer’s day-to-day activities. In 2013, the average American owned up to 4 digital devices and globally these numbers were increasing everywhere, says the survey group. With these devices comes new software and hardware that enables distinct forms of data analysis, unconventional lending practices, cryptographic ledger protocol and ever growing array of financial technology.

“The meta issue of financial inclusion is a lack of understanding of the underserved market.” – Danny Shader, CEO, PayNearMe

Emerging FinTech and Blockchain Economies

Peer-to-peer (P2P) lending is one section of the industry that’s reshaping traditional financial practices. Lending Club, the largest P2P lender, is basically one giant in the business of offering loans online — in contrast to the conventional practices of in-house banking. Forbes claims that by 2020, the lending industry will possibly be underwriting $120 billion USD in personal loans every year. Lending Club itself generated over $5 Billion USD in loans since its inception in 2014. Not too shabby for a FinTech company just coming out of the gate.

Blockchain technology is moving into new realms as well, which is getting financial investors excited. One example is Chain, which announced that it is deploying implementation with NASDAQ using distributed ledger technology to enable trades in the digital marketplace. The company received $30 million USD in funding this year to put towards the growth of their platform. Another spectacle in the eyes of traders is the exchange of stocks and bonds on top of the worldwide ledger. This month, a company called Clique Fund used Patrick Byrne’s TØ.com platform to borrow $10 Million USD in shares. TØ’s platform allowed the sale of 30 stocks that make up the Dow Jones Industrial Average.

Another FinTech formation with NASDAQ comes this week, with their purchase of SecondMarket Solutions (SM). Barry Silbert and company sold the SM business to Nasdaq for an undisclosed amount. The new venture brings together Nasdaq’s private market with SecondMarkets’s transaction software that enables tender offers, shares, and investments. SecondMarket called attention to itself by offering shares of high demand startups like Facebook when it launched in 2009. The service was originally a competitor to NASDAQ’s private market, but now due to SM’s technological efficiency, the two forces will combine. The current CEO Bill Siegel will lead the project, which will be based in both San Francisco and New York. Barry Silbert is pushing his new project, the Digital Currency Group, to investors. So far, the group has been invested in by entities such as MasterCard, Bain Capital and Transamerica Ventures.



TransferWise is a money transmitter that tries to align peer-to-peer technology to help streamline exchanges with fewer fees than legacy banks. The company claims that their protocol avoids red-tape and saves nearly 90% in fees, in contrast to its competitors. Co-founder of TransferWise, Taavet Hinrikus told press, “For too long, legacy providers’ dominance of the market has allowed consumers to be hoodwinked,” and that their service aims to do better. TransferWise received an injection of venture funding through investors such as Sir Richard Branson and Andreessen Horowitz to the tune of $58 Million USD. The company has a customer base in over 50 countries and serves 292 currency routes currently.

Bitcoin Hardware, SME’s, and Legacy Institutions

Andreessen Horowitz also sees a huge future in the land of Bitcoin, being a lead investor in the startup 21 Inc. The company is on a course to try and offer a small hardware toolkit for developers running the Bitcoin network, allowing layers of applications to be created. Some have the opinion that the computer release from 21 Inc. could add a micropayment solution to the worldwide web — potentially changing many aspects of the Internet, such as its advertising model. 21 Inc’s CEO Balaji Srinivasan says in a medium blog post that the service can reward its users by creating multi-faceted APIs for many applications. Srinivasan states,

“The reason you can do these things so quickly is because the 21 Bitcoin Computer includes a built-in 21 mining chip (so you can easily buy things for Bitcoin) and a built-in 21 micropayments server (so you can easily sell things for Bitcoin), all accessible from the 21 command line interface.”

The World Economic Forum’s (WEF) Global Agenda Council reports that, in 2015, Financial Technology has changed everything and has seen strong growth in Small-Medium-Enterprises (SME). The 2008 economic crisis has caused increased regulation and capital costs for SME loans. Despite this hardship, FinTech has created a wide variety of innovative ways to assess credit ratings and fund loans online. The alternative forms of funding helped SMEs emerge as players in the growing global markets. SMEs are typically underrated in the world economy, however, they represent more than half of the global gross domestic product (GDP). These small and medium businesses have seen an upward trend, according to the WEF survey, and FinTech has allowed these SME startups to be “a main beneficiary of disruptive power.” The WEF report shows interview data from some of the top SME organizations and large enterprise companies involved within the FinTech space, including BitPay, CurrencyCloud, Blockchain.info, and Rakuten.

With the ever-present force of blockchain technology adding distributed databases, legacy institutions should worry. New forms of exchange to the world of finance and market analysis can now be cryptographically hosted between machines and software. Cryptocurrencies run their tokens off this automation of accounting such as Litecoin, Ethereum, and Bitcoin, which is the longest distributed ledger currently running. These small systems, available for everyone to use, gives use validation to newer ways of investing, hedging, and trading assets through financial technology. FinTech startups operating with blockchain technology and other protocols are disturbing incumbent financial systems and banking practices that are currently not in the same mindset. Most of the legacy institutions are aware that they need to up their game and reshape their software for the new modern age. The technologies presented today, blending financial applications and cryptography, are creating whole new levels on top of entirely different playing fields. It’s only a matter of time before this shift is out of touch for those who don’t understand these concepts.

How do you feel about the FinTech explosion? Let us know in the comments below!

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