While
many continue to prefer doing things the old-fashioned way, especially
when it comes to dealing with their finances, the digital platform is
fast growing to becoming what could be the most preferred space for
business, and individual finance banking, in the very near future.
Managing Director of Dimension Data (DD), Rowan Kleintjes says that ten
years from now we could be
bypassing the traditional banks, with the
current reality of many individuals bypassing banks to lend and borrow
money from online service providers – indicating a worldwide trend
towards digital transformation.
While efficiency
is the main motivation for online activity, service cost and security
are also real benefits to legit digital platforms. One of the digital
platforms highlighted by Kleintjes as a strong and growing online
facility is that of Blockchain which he reckons could be the leading
transactional platform for the world.
Today
leading vendors such as IBM and Microsoft have released development
tools for the blockchain. Kleintjes said, “By the pace the digital
sphere and all its perks are taking over, the world could, most probably
be a very different place and experience as we have it now.”
Blockchain
– one of the world’s leading platforms for digital asset ledger –
according to Kleintjes, is one of the latest and fast-growing hubs for
financial and other transactions which could make the use of, especially
traditional bank services, irrelevant over the next decade unless there
is significant innovation from banks. The public blockchain essentially
relies on voluntary users to copy, verify, mine and store transactions
based on other volunteer network users of computers across the globe.
For your efforts as a miner you can earn a minimal transaction fee.
The
Bank of Namibia back in September 2017 released a paper that there is
no legal provision for the establishment of virtual currency exchanges
in Namibia, and stated that it is not legal to tender in Namibia. You
cannot use any of the cryptocurrencies in Namibia as payment. Since
there are no regulations in place. While in neighboring country South
Africa this is an entirely different scenario with nine ATMs and two
exchanges where you can exchange your cryptocurrency into hard currency.
SA retailers are accepting cryptocurrency as payment.
Kleintjes,
who also serves as the Chairman of the Executive Committee of the
Internet Exchange Point (IXP) Association of Namibia says mobile is the
key to decentralized philosophy of Bitcoin and Blockchain. Kleintjes:
“Who has physically walked into a bank within the last month? Within the
last 6 months? Within the last year? Banks are the ultimate
intermediary. An institution that has portrayed trust in every way
possible. From their grandiose buildings with marble columns, to the
smartly suited gentlemen that walk through their doors. However, I now
think of my bank as an app on my phone and not this massive institution.
Mobile has removed me from the physical institution since I don’t have
to go there, and I think about my bank in a new way. First we had
banking networks that were symbolized by marble pillared edifices, now
our banking network is contained in our pockets.”
But so what? What’s wrong with intermediaries anyway? A few things says Kleintjes…
Kleintjes:
“Intermediaries are costly, but we still need them. They take a piece
of the action and we pay the price. Just ask the corner grocery store
about the 3.5% credit fees they have to pay. Or the hard working
immigrant who is sending money back home to her family and has to pay a
10% fee just to send money internationally. Secondly, intermediaries are
not efficient. It will typically take 2-4 days for that money to be
transferred. Even if I’m just transferring money between bank accounts
that I own it will take a few days. And, intermediaries are subject to
an increased amount of risk. Because everything has to go through one
institution, there is a centralized database of information or a central
store of value. So if I’m a hacker – this is where I’m going to focus
my efforts. Intermediaries are now this honeypot of money or information
and they are walking around essentially with a big target on their
backs.”
Kleintjes says the world economic forum
conducted a survey, and found that expectations are that at least 10% of
the global Gross Domestic Product (GDP) in 2025 would be stored on
blockchain platforms. Kleintjes: Today, given the Bitcoin and other
cryptocurrency markets as well as private blockchain projects (most of
which are still in the development phase) we have probably between $100
and $200 billion of value being stored on blockchains. 10% of GDP
equates to roughly $8 trillion – so obviously there is a lot of room to
grow.” The downside risk of this is the fluctuation in value of
cryptocurrencies which has a significant impact, last year alone 70%
value in Bitcoin was lost in a few weeks.
Dimension
Data (DD) – a leader in the local ICT solutions market, focusing on
systems integration for business clients in the country, is recognized
and celebrated as one of the most impactful players in the sector by the
worldwide leader in IT and networking, CISCO. Recognized as one of the
top 100 players in the field of ICT, out of 65000 partners worldwide, DD
was awarded the ‘Cisco Winners Circle’ Award for 2017.
Caption: Managing Director of the Dimension Data (DD) Namibia, Rowan Kleintjes and part of his team.
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