Blockchain without Anonymity: Decent Enough for Established Businesses?
Saxo Bank founder Lars Seier is determined to build bridges between blockchain and established businesses through the blockchain Concordium. For instance by removing the option of anonymity within the system.
Businessman Lars Seier felt he was facing something unique, something that could change the world, when he first encountered the internet back in the ’90s. This led to Saxo Bank, which took advantage of the internet’s opportunities, and made him one of the wealthiest people in Denmark.
The same feeling washed over him again a few years ago – this time in his encounter with Bitcoin. And that motivated him to launch the blockchain project Concordium, which he believes has the potential to transform the business world the same way Saxo Bank turned the banking world upside down.
I truly believe that blockchain, with a long phasing-in like the internet had, is going to be an incredibly important technology, transformative in the same way as the internet,
Lars Seier, Chairman of the Board at Concordium.
Cryptocurrencies and blockchain projects like Bitcoin and Ethereum already handle both transactions and smart contracts, have large user bases, and tremendous valuations. But the Saxo Bank founder believes they have one absolutely critical shortcoming if they intend to seriously compete in the established business world: identification of all users.
An Ideological Position Is Insufficient
A distributed blockchain has several security advantages over a centralized database. Furthermore, its transactions are programmable through so-called smart contracts, allowing two parties to program the terms of a trade or an agreement, and then automatically execute it when the terms are met. In other words, smart contracts have great potential for cutting out any intermediaries.
“The beauty is that you can transfer immediately with no option for rollback – what we call finality. And when you’ve dealt a lot with clearing currencies, as I have, you know that firstly the process takes two days, and that secondly, one party may renege on its part of the trade. Blockchain definitively solves that whole slew of problems. Smart contracts in transactions and other areas create certainty that the other party will keep their part of the deal; it is automated trust,” Seier says.
The blockchain Ethereum has offered smart contracts for years, so why is the business world reluctant to embrace this technology?
“Earlier generations of blockchain came from a more anarchistic ideal of wanting to circumvent the established financial system. I am a bit of an ultra-liberalist, so I can sympathize with that, but you won’t be doing business in the real world if that’s your position,” Seier argues.
Know Your User
Concordium is competing mostly on the same parameters as other infrastructures. But the project is different when it comes to identification.
“You cannot operate on our blockchain without being identified on it first. That does not mean everyone can see your identity, but it does mean you are verified. This way, we can trace an individual if the authorities would like us to. And I actually believe this to be our biggest selling point – it surprises me that others have not realized its importance,” Seier says.
The first public version of Concordium’s blockchain – the so-called mainnet – launched this summer, and the requirement for identification is baked into the system itself. Furthermore, the project has this year received investments amounting to 260 million DKK, which, among other things, will go to development and research to make Concordium technologically superior.
“Since we plan on being an option for larger companies, they need assurance that this will not blow up in their faces. So, in addition to our IDing capabilities, we are also cutting edge in science and technology,” Seier says.