Monetas CTO Chris Odom – “Banks Will Race to the Blockchain”- @InsideBitcoins
The CTO of Monetas, Chris Odom, was a keynote at the start of today’s Inside Bitcoins conference in Berlin.
Odom, the author of the Open Transactions System, gave an upbeat assessment of the Bitcoin ecosystem’s status. More importantly, he described how his company was making Blockchain transactions more secure.
Odom noted how despite the falling Bitcoin price, there has been an increase in numbers of investors, transactions, companies, and applications in the Bitcoin space.
“Bitcoin is the black swan of the financial world” said Odom. “The banks are facing an Uber situation.” He believes that central banks will race to adopt the Blockhain and launch their own cryptocurrencies
To understand why they will adopt the Blockchain you have to understand that cash will not ever be given up. Drug dealers and criminals use fiat currency. So why don’t central banks the same problem with credibility? The reason is that once a federal bank floats the currency it no longer has control over what is done with it or responsibility over who possesses currency.
He believes that platforms where accounts can be frozen or a depository can be shutdown, whether it is Bitcoin exchange like Mt. Gox or an e-payment provider like PayPal, is not sustainable.
“Even honest players… are building underground wallets. What that means is that you still have to trust them” Odom said. “My company, Monetas, will not ask you to trust us. We believe there is value in processing off chain transactions.” How to securely process off chain transactions is the key.
For Odom and his company, a platform that utilises the Color Coins protocol is the solution.
Monetas is developing a Color Coins based platform where voting pools of “notaries” reduce the risk associated with typical Bitcoin exchanges and wallets, which are single depositories.
Voting pools are different from the typical multi-signature systems being used in the Bitcoin space. Transactions are able to occur fast, off-chain, and do not have wait for a user signatures as the multiple notaries in the voting pool can verify them. The larger the voting pools the more secure the system.
Notaries are incentivised by transaction fees. Their barriers to entry are setting up a server and downloading the Monetas software. As soon as they are setup and part of the voting pool, Monetas receives Bitcoin payment from the notaries regularly for transactions they approve.
A conference attendee asked what would happen if notaries were compromised. Odom responded that “You don’t have to trust the notaries” as they are unable to “steal” coins from transactions they approve.
Odom also declared that Bitcoin wallets will no longer be gatekeepers.