Man at His Best

Opinion: Is Our Life Savings Ever Safe In The Hands Of Strangers?

Or perhaps the greatest question is: do we even need banks in the future?

BY Hyder Albar | Oct 17, 2017 | Technology

In one generation, we’ve gone from a society that would leave our children with our neighbours to one that would barely exchange words with them. At the same time, we’ve learned to trust institutions more and more.

Would you have jumped into a stranger’s car if it was not for Uber or Grab? Probably not. Maybe it’s because our parents told us not to trust strangers. Well, except for strangers that wear uniforms. That holds up until you meet a paedophile dressed as a policeman. How is “stranger danger” relevant to the future of trust?

To me, the abuse of public trust has become pronounced, especially in the financial sector.

In 2008, bitcoin was created in response to the financial crisis caused by bankers who not just profited from activities that led to the crisis, but also profited from the crisis they created in the first place. #Finception.

From its sketchy beginnings as the main currency used on the Silk Road—an online black market platform—to being dubbed as digital gold today, its rise to ubiquity has propagated a new age gold rush, creating a volatile cryptocurrency trading category boasting over 850-plus alternative coins and a market cap that has grown from USD11 billion to USD137 billion in the last year alone according to

While a spike of USD126 billion of value in under 12 months could certainly trigger furious heart palpitations, what excites me is the growing interest in the underlying infrastructure that powers bitcoin and other forms of cryptocurrencies. That infrastructure is blockchain technology. But instead of asking what blockchain is, let’s start with asking what is blockchain’s utility.

You can read definitions on Google to try and understand what blockchain is, but unless you have a decent grasp of technical knowledge, there’s no way will you be able to infer what it does. To make my point:
I reference the result I get from Googling “what is the Internet?” A global computer network providing a variety of information and communication facilities, consisting of interconnected networks using standardised communication protocols.

Going from that to food, porn, movies, games and fulfilling responsibilities on demand by pressing buttons and connecting to Wi-Fi would be a mental leap if you did not have context. So, let’s start with what blockchain is used for:
It facilitates transactional trust by providing an eco-system that records transactions in a way that is transparent, safe, auditable, encrypted and resistant to outages. Transactional trust, is what you or your organisation applies when you exchange value with another person or business entity. Transaction example: when I give you A, you give me B.

In the context of Ethereum’s blockchain (there are multiple blockchains, just like there are multiple operating systems like iOS and Android), that transaction is automated, encrypted and recorded on a public ledger that everyone has access to. If someone manages to break through the encryption and tries to change the details of a transaction (which rarely happens), everyone will know and the ledger gets corrected.

As consumers, we trust intermediaries like banks, insurance companies, private transportation companies, charities and countless others to help us facilitate transactional trust. These organisations are not transparent, which is what creates the potential for abuse of power.

If you’ve jumped ahead to conclude that blockchain negates the need for us to trust intermediaries. Well done, but it’s only part of the picture. Will blockchain make all intermediaries redundant? Probably not, but quite a few will get displaced.

The ones that stay are the ones that adapt and welcome the change. Forward thinkers in the financial sector are leveraging blockchain technology to increase efficiency, security and transparency in banking applications. Heavyweights like Barclays and DBS, have run successful experiments. The Monetary Authority of Singapore has announced the completion of the first phase to tokenise Singapore dollars through blockchain through Project Ubin in May this year.

What is it to you? Well, it depends on what you want from it. If you’re looking to make a quick buck, there are tons of speculative YouTube videos and articles already out there for you. Heads up before you do, authorities are planning on regulating crypto trading activities in Singapore. So, you know, ask your lawyer if it’s kosher.

If you’re interested in the applications of blockchain technology, how it’s changing the world around us or to learn how you might be able to leverage it, then this column is for you. In my next piece, I’ll share with you a meeting I had with Paul Warrunthorn co-founder of TenX, a startup in Singapore that recently raised USD80 million dollars that is working to make it possible for us to spend our cryptocurrency almost everywhere.

Here’s a glimpse of the vast and open world of trust in the future.

This article was first published in the print edition of Esquire Singapore, October 2017.