A report by the World Trade Organization (WTO) was recently released, which revealed that blockchain technology would have dramatic impact in the financial system of the world. The report specifically highlights Ripple, and mentions Bitcoin, Ethereum and IOTA.
The new report, titled ‘The future of world trade: How digital technologies are transforming global commerce’, says that blockchain has “the potential to profoundly transform the way we trade, who trades and what is traded.” The report also mentions Ripple specifically and talked about how it could radically change how financial institutions move money.
“Ripple has ambitions to circumvent the correspondent banking model through its distributed ledger platform. It gives banks the ability to convert funds directly into different currencies in a matter of seconds and at little to no cost, without relying on correspondent banks,” the report stated.
The report also said that the company has licenses with over 100 banks and financial institutions. However, it seems only a limited number of large operations have taken place till date. “Banks are still testing the system,” the report mentioned.
Apart from Ripple, the report covers IOTA as a leading distributed ledger technology which is not based on blockchain.
“Blockchain is the most well-known distributed ledger technology (DLT), but an increasing number of other models are being developed that, like Blockchain, are distributed and use various cryptographic techniques, but that are moving away from the concept of ‘blocks’ – or even from both the concepts of ‘blocks’ and ‘chains’,” the report said.
IOTA was mentioned as an example, stating it to be a cryptocurrency designed for machine-to-machine communication. “Each transaction is linked to two previous transactions as part of the validation process to form a ‘tangle’ rather than a chain,” the report explained.
Bitcoin and Ethereum, on the other hand, were mentioned as pioneers in the emerging tech. The report also mentioned how these platforms are highly resilient to cyber-attacks, pointing out the challenges in scaling.
“Firstly, scalability of the main public blockchains remains limited due to the predetermined size of blocks and to the level of energy required to power the networks. The Bitcoin platform, for example, handles about seven transactions per second on average and the public blockchain Ethereum twice as many, while Visa can process 2,000 transactions per second, with peaks of 56,000 transactions per second,” the report highlighted.
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