Why SA businesses are more likely to use Ethereum and not Bitcoin
Despite being underwritten by the same technology, Ethereum has a far lower profile than the more popular Bitcoin – and this could help the new technology have a far greater impact.
This is according to Monica Singer, former CEO of Strate, who has speaking in her new position as a Blockchain Business Ambassador with international decentralised ledger technology (DLT) outfit ConsenSys.
Strate is South Africa’s central securities depository, and is licensed to be an independent provider of post-trade products and services for the financial markets.
Alongside a number of other duties, it is responsible for tracking and reflecting all transactions on South Africa’s four stock exchanges.
Ethereum is important to these companies, because embedded in the system are “smart contracts”, said Singer.
If one takes the view that corporations are just a complex web of contracts and obligations of varying scope and stature, then such commitments could be coded into Ethereum, she said.
“It opens the door for all sorts of new and interesting possibilities such as emancipated machines that own themselves and people being employed directly by pieces of software
“Smart contracts are decentralised, self-executing agreements which are little computer programs directly built into a ledger, and allows financial instruments, like loans or bonds, to be represented, rather than only cash-like tokens such as Bitcoin,” Singer said.
“(These contracts) could be the building blocks for entire dispersed independent organisations engaging in economic transactions—buying and selling things, hiring labour, negotiating deals, balancing budgets and maximising profits – without any human or institutional intervention.”
Confidence in the new technology is also growing among South African financial institutions, so much so that blockchain technologies will ultimately transform how services are conducted, operated and delivered, she said.
This trend has been echoed worldwide, with a survey of international information technology influencers conducted by the World Economic Forum (WEF) predicting that at least 10% of global GDP is expected to be generated on Blockchain platforms by 2025.
“Similar to the way Bitcoin disrupted the money system by harnessing Blockchain technology, Ethereum may do the same for applications of all shapes and sizes,” said Singer.