How blockchain is changing global commerce • St Pete Catalyst
On the final day of the St. Petersburg Conference on Global Affairs, two local experts broke from the mold of discussing world issues, instead focusing on emerging global opportunities through blockchain technology.
As the international conference drew to a close on Friday, St. Pete Catalyst Joe Hamilton, publisher and head of the Metacity network, took the stage at the University of South Florida in St. Petersburg with BlockSpaces co-founder Gabe Higgins. In addition to those inside the ballroom, organizers announced a global streaming audience of 2,500 people for the penultimate presentation of the four-day event, breaking the previous record of 500 viewers.
The discussion explained how blockchain technology, cryptocurrency and decentralized finance are rapidly changing the landscape of international business. Higgins, whose Tampa-based blockchain integration platform has raised more than $7.25 million in venture capital funding in less than a year, put the rush to Bitcoin adoption into perspective.
“It took Apple – the largest company in the world by market capitalization and value – it took them about 24 years to reach $1 trillion in value,” he said. “Facebook, it took them 18 years to get to a trillion dollar value.
“But Bitcoin, it took Bitcoin 12 years to reach $1 trillion. It is growing faster than the Internet itself in the 90s.”
Bitcoin and blockchain technologies are intrinsically linked, as the alpha crypto was the first to apply the innovative data structure in 2009. In 2014, people began to realize the potential of blockchain in global financial and inter-organizational transactions .
Higgins said blockchain solves the long-standing computer problem of preventing outside sources from endlessly replicating digital information. The technology enables the global coordination of human efforts, and the entire system is governed by open source code, eliminating the corruptible hierarchy typically found in such enterprises.
“I liken it to a standing record for the world,” Hamilton said. “It’s security through transparency.”
Higgins said blockchain and cryptocurrency eliminate the need to trust multiple financial institutions when transacting, especially internationally. Blockchain technology also alleviates the friction caused by a cumbersome chain of custody and varying regulatory environments. He said the friction and associated risks come with real costs and side effects.
Higgins explained that with the first iteration of the web, people could simply read information stored on the internet. With the next form of the Internet, Web 2.0, people could read, write and post information freely. Web 2.0 has led to Big Data and social media conglomerates, placing the majority of control over the Internet in a few centralized entities.
Higgins called Web3, which developers and technologists are currently building, “the dimension of value.” Web3 enables digital ownership and allows users to maintain and control their digital assets. Higgins said people with both good and bad intentions are now realizing ways to use these innovative technologies.
“You have nefarious businesses that are also very tech-savvy — which they always have been,” Higgins said. “So we have to guard against those things, but for the most part it’s beneficial to humanity.”
To further illustrate the usefulness of blockchain in global commerce, Hamilton shared how he employs a graphic designer in South Africa. He said it was easier to get on a plane and fly to South Africa than to transfer dollar payments due to widespread corruption and regulatory hurdles.
Blockchain and cryptocurrency allow him to transfer money to his CashApp account, convert it to bitcoin, and send it seamlessly to his employee.
“The whole thing takes less than three minutes and it cost me about 12 cents,” Hamilton said. “It’s utility, and that’s why it’s not tulip bulbs.”
New technologies have also caused a significant change in what people consider to be stores of value. Many people have turned to non-fungible tokens (NFTs) to keep pace with an increasingly digital world. NFTs prove ownership through blockchain verification, and Hamilton realizes the lack of understanding about how arguably rudimentary images now sell for millions of dollars as NFTs.
Hamilton used the US Constitution as an analogy. A copy of the Constitution, he noted, recently sold for $42 million, a value many accept because of its rarity and historical significance. He said its value is linked to its authenticity, as well as the time and place it represents. If someone later discovered several more copies of the Constitution, or if the copy sold for $42 million was a fake, its value would plummet.
Hamilton said if Elon Musk landed on Mars and drafted the Red Planet’s constitution, it wouldn’t be with a quill pen and parchment paper, but via a computer. This constitution would still have historical significance and great value, without the risk of counterfeiting.
“That’s what this permanent digital record allows people to do,” Hamilton said. “This (NFT) is the new accepted vehicle for value that our children will think is completely normal, even though we think it’s completely crazy.”
Higgins described other uses for NFTs, such as their ability to function as a literal key. He said someone could use smart locks on their home, car or whatever they want to secure, and the only way to access it is through an NFT stored on a mobile device.
Higgins said NFTs provide a mathematically safe way to generate access codes that cannot be replicated or manipulated.
“If you own it, you own it,” Higgins said. “You remove any kind of counterparty risk that comes with you being able to use your asset in a specific way.”
Major institutions are beginning to realize the utility that blockchain technology brings to the world. Higgins announced a partnership between USF and BlockSpaces to create a digital identity for students. He said the university could issue certificates and degrees as a verifiable digital asset in perpetuity via blockchain.
Walmart is also at the forefront of using blockchain technology. Higgins said the global conglomerate uses five different blockchains in 10 separate divisions. One of the most successful uses is tracking products across the vast supply chain network for regulatory compliance and safety measures.
Higgins recalled that during an outbreak of E. coli in 2020, Walmart had to remove all of its romaine lettuce from store shelves. For weeks, Walmart wasted products, time and labor going through a paper trail because supply chain records existed in pen and paper.
“It turned out to be a single bad batch at one farm,” Higgins said. “And for that, the whole industry has suffered. If this information were digitized, you could instantly find out where that bad batch came from.
Higgins said that following the costly mistake, Walmart launched its Food Trust Network to trace products using blockchain.
Higgins encouraged attendees and observers around the world to keep an open mind about emerging technology and to stay curious. He said there is still a lot to discover and applications are evolving to adapt to the ever-changing global business landscape.
“When I first started getting involved in bitcoin at the end of 2012, I had no idea how much of an impact it would have on the world,” he said.