Unlock the Blockchain | Global finance magazine


Chad Cascarilla is CEO and co-founder of Paxos, a fintech startup regulated as a trust company. He spoke with Global finance on the current state of the blockchain, common misconceptions and why the absorption by companies seems slow.

Global Finance: how do you see blockchain?

Charles Cascarilla: For me it is a very interesting database tool. In reality it is not really a new technology; It is made of more technologies and the youngest technology in blockchain is 20 years old. The novelty is the way in which the technology is combined to create a distributed database, compared to more typically centralized databases. We believe it is the best technology today to achieve what we are trying to do in Paxos: mobilize resources and simplify settlement, but it is ultimately a tool.

GF: What exactly is this tool for?

cascarilla: Blockchains are useful when you have a network of participants working together. Almost all industries with many companies that negotiate together can find power in a blockchain, eliminating the need for constant reconciliation between the different parties. It allows everyone to understand who owns what, when and creates efficiency.

Financial services are obvious, because there are an infinite number of intermediaries and the need for a better deal. It is an infinite tower of Babel, which accumulates trillions of dollars of capital. Only in US equities, they are $ 40 billion – $ 50 billion of mobile capital that is constantly trapped, without even including reconciliation errors. Banks are also turning into blockchains. Their success will depend on the fact that they are using it to create truly value-added services. Some companies will get real benefits. Those that do not fit will lose. Businesses will struggle if they pursue the blockchain instead of solving real problems.

GF: In which other sectors do you see blockchain as relevant?

cascarilla: Whenever it is necessary to keep a register and there is a lot of reconciliation between counterparties and intermediaries. Some examples are health insurance claims, real estate registers and supply chains. Walmart, for example, uses the blockchain to trace lettuce; and Maersk, the shipping company, uses blockchain.

GF: What does it do for its users?

cascarilla: You are creating a chain of titles, so you understand who owns what, where and when. Blockchain offers the possibility of having more people or institutions accessing a database, but each one controls their own information. All parts are agreed. You can enter any information on the blockchain: information on health care; lettuce; sea ​​containers; nothing. Even a very large company, such as one with many international subsidiaries, could create an internal blockchain for their entities around the world.

GF: a new survey found that 70% of companies are not even thinking about using blockchain. Why is absorption not greater?

cascarilla: It is still in its early stages. Blockchain has aroused much fanfare and is not a simple solution. Companies are resistant because they can be confusing and complex. Solutions must save money, be simple to adopt and have a significant impact on the first day: this is magic.

GF: some countries or regions are more advanced than others?

cascarilla: Asia has bananas with public blockchains. A huge amount of retail [blockchain] The activity is very focused on Asia. The United States probably has more robust start-up activities, the interest of companies and the enthusiasm of companies. Europe and Asia are linked to the second place in those areas.

GF: What about safety?

Cascarilla: Blockchain is all about the internet, so everything comes down to passwords and where you save them. Ideally, save them on the Internet and store your blockchain data and resources in a secure and regulated place. Ultimately, it depends on how people use the tools. Blockchain will not solve world hunger and peace in the world, but it is a powerful tool that can benefit many people and industries.

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