By DENISE MAYCOCK
Tribune Freeport Reporter
MICHAEL Casey, a leading author on Blockchain and Cryptocurrency, said the Caribbean is a great environment to explore the technology that would eliminate the impediment to movement of money in the region.
He noted that there are so many independent currencies across the region that create massive inefficiencies in payments and trade.
“I am fascinated of the role that crypto could play in this part of the world,” he said. “You got capital controls in place that are a source of friction and an impediment to movement of funds and innovation, etc.”
Mr Casey noted that while financial institutions or banks have done well for some time in the Caribbean, a lot of their banking functions will go away because of the new technology.
“The technology is making (some banking functions) redundant, and it’s not just blockchain, but artificial intelligence (AI), and everything else is really eating into the business model of banks. So, there is a threat,” he said.
Mr Casey also noted that blockchain could play a huge role in terms of distributive energy systems.
“The horrible hurricanes exposed the vulnerability of centralised energy system; there has to be more focus on a more resilient distributive system.
He added: “I am doing something in Puerto Rico that is aimed at building decentralised distributive microgrids where communities can transact with each other. The idea being that rather than relying on the price that is being set by a central authority in Puerto Rico, the price is now set on a local level - it is what I am calling energy democracy.”
Mr Casey explained that blockchain it is a ledger keeping system that removes the need for a utility entity invoicing customers.
“If you place the ledge keeper in the middle it would not need a utility invoicing everybody, checking the meter,” he explained.
With blockchain, he said that there is a capacity…to have communities form transactive grids.
“Will it work? We don’t know, but we think the idea of pushing this model of microgrids and decentralised energy (could be beneficial),”
He noted that it should be a system to allow the community to form and build as cheap as possible on the resources they have.
“These are the kinds of ideas that this technology allows us to confront. It’s all about empowering people at the bottom,” he said.
Mr Casey noted that bitcoin and blockchain serve as an "immutable ledger."
"You can’t go back and change it. It is an append-only ledger, and to have to change that ledger it would cost all the money," he said.
According to Casey, bitcoin is a common ledger that everyone agrees on and then produces, on an ongoing basis, a distributive ledger.
"So rather than a ledger that resides centralised in one single third-party control model siloed, each reconciling with each other, it is a distributive ledger, everybody gets to update it in real time together based upon this process that bitcoin is managing, and therefore all these other blockchains are working on as well,” he said.
He noted that Bitcoin has been in existence for nine years and it is worth $100 billion. "There is a huge incentive to hack this system, but the bitcoin network itself, unlike the dollar system which collapsed in 2008, has not ever been brought down, despite the fact, there is no one in charge, and it's worth a lot of money," Casey said.
He admits that the system is not perfect and that certain blockchains have been hacked. But Casey believes that the bitcoin model shows what is possible because in addition to a consensus mechanism, the proof of work concept, there is a cryptographic quality to the ledger where every single transaction is tied to all the other entries in the past, and it builds an ongoing chain.
Casey explained that going back and changing one decimal point to one transaction from seven years ago, would change that entire structure of that ledger.
"It is kind of like the whole exploding dye solution when banks would put these things next to cash in the vaults and robber gets dye that explodes in the face, and the evidence is clear that someone broke in - it makes it immutable. It has not happened to bitcoin. And this is really a big idea; we have a record in history that cannot be changed - we never had that before," he said.