BITCOIN

Becky’s Affiliated: How Bitcoin & Blockchain Technology Eliminate the Need for Trust

TAGs: beckys affiliated, Bharath Rao, Bitcoin, Blockchain, Coinpit.io, Editorial, Rebecca Liggero, Video

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One of the many things I love about innovative companies in the Bitcoin and blockchain space are the leaders who stand behind the companies.  They range from university newly-grads to established professionals, often times coming from technology and finance hubs such as Silicon Valley and Wall Street.  Regardless of their level of experience, these leaders are smart, hungry and passionate about their work and I love that.

This week I spoke with Bharath Rao, a seasoned technology, stock trading and Bitcoin enthusiast who also enjoys a little bit of poker for fun.  Rao spent ten years on Wall Street mastering the art of trading and in 2014 he designed and built Coinpit.io, a trustless, private and transparent Bitcoin exchange platform.

“I’ve always been a technology enthusiast and I’ve been a trader for a while and when I heard about Bitcoin I realized this is the perfect instrument for trading, for programmable money.  It can do things that, if you try doing with a regular means, it’s a lot more cumbersome and a lot less powerful.  So Bitcoin was a natural choice as an instrument for us to do our trades”, Rao shared.

Rao’s vision for Coinpit

Rao wanted to create the most secure blockchain platform exchange in existence and the result was Coinpit.   Users of Coinpit are not required to transmit their private key to the exchange and only the user can transfer and receive their funds. In the event of an exchange failure or shutdown, since the user’s finances are on the blockchain as opposed to a database entry, no money will ever be lost.

What Rao has done with Coinpit is eliminate risk and remove the need for trust.

We believe a lot of financial crisis are caused by trust that has failed due to various reasons and if you remove the need for trust, people will find it easier to trust something”, said Rao.

He continued, “So it’s the same as when you look at a machine and you know how it works, like a vending machine, you sort of know what to expect, but if it’s a big black box, you’re buying jewellery or something like that, you need a great deal of trust and when that trust is broken, it can impact the morale of your trust in that system itself”.

To Regulate or not to Regulate

I asked Rao’s opinion on the need for regulation of Bitcoin.  I’m not convinced Bitcoin needs regulation due to its immutable security and because waiting for regulation is stifling innovation in the field.  Rao agrees regulation is not necessary, or at the very least, Bitcoin technology will greatly simplify the job for regulators.

“Lets see why regulations come up in the first place”, said Rao.  “Regulations occur because people get hurt and lose money, they go and complain, or pre-existing players want to protect their turf and they lobby for regulations to prevent new entrants”.

“Regulations typically regulate expectations.  Unsaid expectations.  So if you put your money in the bank, there is an unsaid expectation that the bank will not run away with your money and the government will regulate this by making the bank post a bond and so on.  When these unsaid expectations can be programmatically qualified into the currency itself, the need for regulation will disappear”.

“As an example, if you look at drunk driving which is a very common law across the world, it may become obsolete in 25 years because the car will be able to sense you’re inebriated and just do auto-pilot and just take you where you want to go.  I think this kind of automated programmatic features are also convenient for financial systems which will make regulations simpler”.

“The regulators should actually jump on Bitcoin because it makes their jobs so much easier of protecting the consumers”, he added.

Bitcoin & blockchain to revolutionize eCommerce

Bitcoin and blockchain technology have applications far beyond exchanges, in fact, I believe Bitcoin will forever change eCommerce and the way we complete transactions across the globe.  Rao summed it all up perfectly.

“What we saw when we had the eCommerce revolution in the 90’s was that there was this new capability that the world was hungry for, which was the ability to shop from your couch and we have something similar with Bitcoin right now”, he said.

“You have a decentralized ability to make transactions, you don’t need another person to act on your behalf, you don’t have to worry about custodial risk and many of these are properties in cryptocurrencies that are only beginning right now”.

“We are going to see a lot more innovation and a lot more capabilities and the world will simply move with this.  Commerce will gradually but soon rapidly move to the new paradigm because it will be cheaper and more frictionless, it will be global, it will be easier for regulators, it will be safer for consumers and I see its pretty obvious that this is the way to renew systems, to replace existing systems”, he said.

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