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Mastercard Blockchain Now Open for Payment Processing
Mastercard has opened up their own blockchain to allow payment transactions to be carried out between selected banks and merchants, but this process uses fiat currency and not bitcoin or other cryptocurrencies.
Quite a few companies have taken a keen interest in what blockchain technology has to offer, and one of these corporate entities is Mastercard, the massive credit card provider. Mastercard has spent the last few years developing its own blockchain, and now the as an alternative method of paying for goods and services. The major difference found in the Mastercard blockchain is that it does not use its own cryptocurrency. Instead, it uses real world money.
Mastercard Blockchain Open for Business
The Mastercard blockchain is now open for specific banks and retailers to use as a payment processing system. So far, participation in this blockchain is by invitation only. The last week has been a busy one for Fortune 500 companies and blockchain technology. IMB opened up earlier in the week. Probably the most intriguing aspect of the Mastercard blockchain is that it does not use its own cryptocurrency, which is something that even the IBM blockchain does.
Justin Pinkham, a senior vice president at Mastercard Labs, says:
We are not using a cryptocurrency, and we are not introducing a new cryptocurrency, because that introduces other challenges—regulatory, legal challenges. If you do a payment, then what we can do is move those funds in the way that we do today in fiat currency.
Why the Mastercard Blockchain Could be Very Successful
Some people may look at the and shrug, but there are some factors in why it could be very successful. The first such reason is that Mastercard is lord and master of a vast financial empire, so to speak. It has a settlement network that counts 22,000 banks and financial institutions from all over the world. Few other entities have such a global reach. Another important factor is that the Mastercard blockchain only uses fiat currency, which reduces costs as there’s no need to convert one form of cryptocurrency into another and then, eventually, cash.
This reduction in cost is also amplified by reducing fees for cross-border payments. Normally, a payment that crosses national borders would have to pass through different sovereign banks, racking up fees with each step. The Mastercard blockchain would remove those steps entirely, thus making the payment less expensive and probably faster. Eventually, Mastercard’s blockchain could be used for other items, such as luxury goods to provide “proof of provenance.”
Overall, this is an interesting development. Could the lack of a cryptocurrency tie-in fire a shot across the bow of other blockchains? One also wonders how the energy use for a single transaction on the Mastercard blockchain compares to current credit card transactions and bitcoin. A Dutch bank that the average energy cost for a bitcoin transaction was 200kWh, and the cost for an Ethereum transaction was 37kWh. By comparison, a credit card transaction only incurred an energy cost of 0.01kWh.
Do you think the Mastercard blockchain will have a major impact? Does the fact that it does not use a cryptocurrency have long-lasting ramifications? Let us know in the comments below.
Images courtesy of Wikimedia Commons, Pixabay, and Flickr.
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Why The Bitcoin Miners Are Destined To Lose The Hard Fork Wars
Excuse me for indulging myself, but there are many points of view towards what may be an impending hard fork for bitcoin. This may come across as a loosely coherent ramble, but at least it is short and sweet. There is enough here to put it on wax, so here’s what I see, in the big picture.
This is in response to the created by Peter Rizun yesterday, outlining how this hard fork may play out, and essentially showing a way BTU wins, in the long run. (Roger Ver tweeted his support for this post, so I read it and posted most of these thoughts in the comments section, and here we are.)
“Today approximately 40% of the network hash power is signaling that they wish to begin producing larger blocks.”
— Roger Ver (@rogerkver)
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In my humble opinion, the problem I see coming is if BCU breaks off, it will become an altcoin, as has been established by the bitcoin exchange establishment. These miners can mine all the blocks they want, if the greater community doesn’t trust their developers, doesn’t want an altcoin, and isn’t buying BCU, it is irrelevant by design.
The market will decide who wins, and anybody who is not a miner wants to stick with Core and their chain. The miners are one thing, the market is something else. The miners might win a battle, but they would lose that war. They should keep that in mind.
Without those miners, BTC would definitely take a hit, but the Core developers could then quickly move to a 2MB upgrade and get SegWit and The Lightning Network approved, creating greater bitcoin functionality, from a trusted group of developers, and an incredible upside in off-chain scalability that an on-chain approach would be hard pressed to match. All without the centralization and control of the miners.
Users will follow anyone who is going to implement SegWit. The market is sold on this concept as a boon to bitcoin functionality. BTU has not done a very good sales job at all regarding their position. Scaling away from miners will hurt mining, but it will let bitcoin reach its full potential.
BTU needs to sell their mined Bitcoins to a market. I’m not seeing much of a market for BTU, outside of the miners and BTU investors, themselves. The miners do not control bitcoin, and even Core does not control bitcoin. Maybe, just maybe, The People control bitcoin’s future growth? Anyone who thinks the market doesn’t have a handle on who each side is looking out for here is fooling themselves.
Just seeing how the community is responding, keeping my ear to the ground, the greater community will not follow the miners, who are primarily looking to turn a digital buck in bitcoin. They will follow Core, who is looking after the greater good. Miners will lose that tug of war.
It has become clear that BTU developers cannot replace BTC developers, as the recent bugs have shown the world, but BTC miners can be replaced. There are plenty of people around the world who want that job, and can do it just as well.
This power struggle is really temporary in nature. People will not follow miners looking for profit first, and who want to hijack the entire system, from now on, in order to get it. That is not leadership.
At the end of the day, The People will decide to back Core. The only question is when will the dissenting miners, clouded by visions of endless bitcoin profiteering, figure this fact out?
If the miners didn’t get the memo, that the vast majority of the market will stick with Core and not dump BTC for any BTU altcoin, use this. Like bitcoin itself, it’s far from perfect, but it’ll do just fine.
How do you think a hard fork would play out? Should there be an increase in block size? Let us know what you think below!
Images courtesy of bitcoin Core, AdobeStock
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