Trade finance investor and entrepreneur (ex-Euler Hermes) debunks the myth that blockchains for fintech are too expensive to replace traditional databases. They use BTC too, btw.

Full interview here: [](


Interesting excerpts:

* the costs

“There are different ways to define efficiency, cost is only one of them. Indeed, in most of the cases running distributed databases costs more than having a centralized one. But focusing only on operating costs completely ignores other efficiency factors that need to be taken into account. Certain blockchains may solve certain problems better than centralized approaches, that is what shifts the importance of operational costs.”

* news is not plastered everywhere but they’ve been working on apps for years

“The first initiatives to develop blockchain solutions for trade finance and credit insurance date back from 2014 […], long before the hype that we are currently going through. What we see now is just the communication outbidding related to the hype. In some cases it is disconnected from reality.

In fact, there is no justification for communication about blockchain in our industry at all: Customers are not interested in blockchain, they are interested in solutions.

Blockchain is a technology and a philosophy of business model architecture. We can rebuild parts or all of our processes and services upon blockchain, but our customers don’t need to know anything about that.”

* they use bitcoin too

“Ethereum is a great blockchain […] But certain pain points of our industry depend on simple payment processing and can be fixed well enough with 1st generation blockchains like Bitcoin.”

* the connection to “real world use cases”

“Majority of the data in trade finance is fragmented by design. Most of small business data is held privately, […] they are not part of any current financial model. What it means is the data used for most models in trade finance is not representative of the credit risk of small corporates. That is one of the main explanations of the credit crunch experienced by small and medium-sized enterprises.”


“It may look like a wild jungle, but it is possible to navigate through it safely by taking baby steps. We can for example provide the responsibility for debt obligations to crypto-backed lending platforms, we have quite reliable ways to compare the cryptocurrency lending market with similar market segments that we know better.

Another good stepping stone is issuing parametric solutions based on smart contracts. In insurance, parametric contract does not compensate the pure loss, it instead makes a payment when the triggering event occurs. The typical use of this system is to handle a high-intensity event that is not likely to happen but when it does happen, it will most typically incur a loss. In this use case, parametric insurance reduces transaction costs because it lessens the need for a detailed loss assessment. Starting to leverage smart contracts within this type of solution is a very reasonable step.”


The guy’s LinkedIn: [](

View Source

View Reddit by helenkavondrackova