From voting data to land ownership, the manner in which records are kept affects the whole of society. In today’s ad-driven economy, much of that data is held in corporate servers, and society is questioning the overseers.
Look no further than the recent Equifax breach for justification of societal concern. Such intrusions on centralized databases beg the question of responsible data-storing practices, forcing regulations like the European Union’s right to be forgotten act — the General Data Protection Regulation — and spurring new technologies, like the blockchain, to rebuild society’s trust.
“Companies are fallible, and so what blockchain does is it allows us to make a more infallible system to keep access to those records you and I care about,” said Jeremy Almond (pictured), founder and chief executive officer of Paystand Inc. During a visit to theCUBE’s studio in Palo Alto, California, home of SiliconANGLE Media, spoke with theCUBE host John Furrier (@furrier) about the larger role of blockchain in modern society and how the technology has impacted both enterprise infrastructure and business models.
Claiming to be the first payments-as-a-service provider, Paystand combines blockchain tech with software services to digitize the paper check and automate a hefty chunk of the accounting department’s manual work. The four-year-old startup sees blockchain as a tool to revolutionize monetary exchanges between businesses, contextualizing transactions with additional data points for speedier verification of identities and accounts.
“You and I, we Venmo each other,” said Almond, likening Paystand’s business-to-business payments to Venmo’s consumer-to-consumer process. “But when the business goes to write a check, when they get an invoice, they send out a check. And so we digitized the whole process — the moment that the invoice is ready to go to the moment it gets in the bank.”
Indeed, digital transactions have invaded the consumer space. But on the enterprise side, cloud’s impact seems to have bypassed the accounting department, according to Almond. While customer relations has moved to cloud with platforms like Salesforce, finance remains stuck in legacy hardware and risk-averse mentalities. But after a string of economic disasters, from Enron’s implosion to the market collapse of 2008, society demands better from its institutions.
“I think society said financial services and core parts of our economy actually could … do better,” Almond said. “And I think the magical thing about technology is we get to imagine the world not as it is, but as it ought to be. … I think that’s the purest part of what the folks in the blockchain movement are trying to do.”
The perks and perils of blockchain
Blockchain tech can save the enterprise money as well, baking in efficiencies at the data management level. Almond sees blockchain as the necessary point of democratization to enable finance to succeed in its digital transformation.
“Private blockchains actually have the ability to, not just decentralize how money moves or network operate, but how an internal system operates,” said Almond, going on to give a Paystand use case:
“When a payment goes out, often times you need your accounts payable person to send a payment out, but the controller or the treasury or someone else has to sign off on it. So that signature, you need it to be valid, trusted … you want an audit record. Blockchain is a really, really good use case for something like that. That’s not pure-play payments; it’s not pure-play settlement; it doesn’t require a million people to get on. It just can operate in the business in a really critical function, in a better way than the current technology does.”
As disruptive as blockchain tech has been in recent years, some of its byproducts, such as initial coin offerings, raise more questions than answers amidst the digital transformation. Almond hopes for balance between society, business and the law, seeing healthy discussions on rising interest in cryptocurrencies. As alternatives to traditional financial paths slowed by regulations and pre-internet infrastructures, cryptocurrencies have spawned ICOs from entrepreneurs ready to rethink fundraising.
While Almond is glad to see the innovative attitudes underlying ICOs mostly unhindered by regulatory bodies like the Securities and Exchange Commission, he also thinks such anxious entrepreneurs could learn from traditional methods. “I think there’s some danger in ICOs coming in, in the early-stage market,” he said. “Because early stage companies tend to be … so nascent that they need guidance. … I actually think early-stage investors have a lot of value in that space.”
Watch the complete video interview, and be sure to check out more of SiliconANGLE’s and theCUBE’s CUBE Conversations.
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