Who Will Win With Blockchain? How About Card Networks, Says Credit Suisee

  • Nancy Miller
  • August 15, 2016
  • 1

© Can Stock Photo Inc. / RostislavvCredit Suisse recently published a 135-page report on the outlook for bitcoin and the blockchain, and there’s a lot to chew on.

The investment bank surveyed 31 analysts across five disciplines in five different regions. In sum, the analysts were excited about the prospects for blockchain but less so for the future of bitcoin, which they say has 13 (count ’em!) hurdles to overcome.

Winners in the blockchain revolution include payment companies and card networks. “We see the biggest impact in areas like financial services, exchanges and post trade settlement, where T+3 settlement looks ripe for optimization. In particular, we see scope for vertical integration across exchanges, clearing, settlement and registration.”

Here are a few key experts:

Separating Blockchain from Bitcoin
While in our view, many barriers to mainstream adoption mean bitcoin doesn’t appear to
present a disruptive threat, blockchain shared ledger technology (SLT) may have features
that could prove disruptive to multiple industries. We like to see the disruptive benefits of
this technology in three ways:
■ Immutability of record. There is an audit trail.
■ Disintermediation of trust. Less reliance on trusted third parties.
■ Smart contracts. Self-executing commitments, fulfilment of which can be trusted.

On bitcoin vs blockchain and why it matters:

We think about the difference between bitcoin and blockchain as similar to the difference
between hypertext transfer protocol (HTTP) and the internet. HTTP is the protocol created
by Tim Berners-Lee which hyperlinks text nodes to each other and upon which the internet
– a distributed information exchange system – sits. Similar to HTTP as the foundation
stone of the internet, blockchain is a protocol, and bitcoin the application for a distributed
value exchange system.
Some have gone so far as to say that blockchain is the missing link of the internet.

The case for financial services:

The market opportunity appears broadly two-fold: (1) A shared ledger system creates a
significant opportunity for cutting costs in a number of areas where current processes are
slow and cumbersome. These areas include the proces sing of trades in securities, trade
finance and also in payments, particularly international payments. (2) In addition, there are
opportunities on the revenue side. Shared ledger systems combined with better data
analytics may enable a much greater understanding of clients. This could lead to more
products being sold to existing clients (where current client needs are not currently

The report also looks at how blockchain media companies and assesses the impact on specific stocks.

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