Marketing Director at PersianGIG.com
Bitcoin and Blockchain technology at a glance
If we are asked how much we trust somebody, the answer would probably be a collection of sentences which expresses our mental estimations about his/her possible reactions in different situations. Now if the question is solely about financial issues, we would be able to determine a specific monetary amount so that his/her honesty and truth could be trustable in less amounts. Now picture an algorithm allowing us to put a part of your trust towards somebody in a pyx, lock it with a key without worrying about any leakage and deliver it to your trustee so he/she can trust on the first audience based on your trust. This way a considerable amount of existing trust among people in small and/or large social networking communities will stream as specified volumes of wealth, commodity, consensus or any other exchangeable valuable roles flow. Thus people can trade, measure, protect or transfer a part of valuable phenomena, which they trust their credibility, in deals. We may lose just a little bit of technical details if we say Bitcoin and its newborn virtual currency family are working like this.
Blockchain technology is a novel wise algorithm from the fin-tech family which allows value units to pack and stream between people so that their credibility goes beyond each one’s mutual trust and become a new economic transaction infrastructure by accepting basic rules of this algorithm between all users as public consensus.
recognized by Federal Reserve as a commodity
recognized by the Central Bank of European Union as a prevalent international currency
recognized even recently as an international currency by Russia, the country had been ordained serious punishments for Bitcoin transactions before
Simple and inexpensive transactions
The feasibility of coexistence and numerous applications in social networks and big data
Controversies, thefts and dirty money transfer stories
Various non-monetary applications in security services market
They all are familiar news about a technological and open movement in international information society and their shared keyword is “Bitcoin”.
Being aware of plentiful opportunities in this new inexpensive secure technology without needing to spend enormous resources emphasizes Bitcoin and other cryptocurrencies assessment in our beloved country, Iran, more and more.
If we only consider cryptocurrencies as money we will figure out that developers’ society has made a market cap more than $ 10 billion by spending less than $ 100 million in total to create whole apps and services till now.
Although the result of under constructing programs for newborn currencies in High Council of Cyberspace has not yet been approved or issued as a law but it’ll be attractive to discover value making fields for us according to potential scientific, economic, geopolitic and strategic position of our country in current and future global relations. Opportunities which must not be unaware of their risks and threats.
To study Iran’s facing opportunities and challenges in the international community to enter blockchain technology market will be the subject of following issues of this article series.
Bitcoin and Blockchain technology Implementation in Iranian PSPs
The internal transaction market is an important researchable use cases of blockchain technology implementation in any country’s cryptocurrency related case studies. But at the current period Iran’s payment services market is involved to the serious challenges caused by internal and international changes. Meanwhile blockchain technology and cryptocurrencies implementation has special importance as an instance use case of Fin-Tech. Iran’s current state of payment service puzzle will be surveyed by focus on cryptocurrencies as following.
First of all PSPs has been created as outsourcing unite of the certain routine activities alongside the banks. E-commerce growth and payment channels variety made their products portfolio more rich and profitable.
After the abrupt growth of internet and social networks, virtual currencies became keeping and transferring value tool in form of tickets, credit tokens and various chips inside network and reached their own share of money and payment market which was not satisfied by PSPs.
Relying on the blockchain technology in past five years cryptocurrencies like bitcoin started to earning their even small but increasing share of money and transaction market which is kept so tight by special specs such as autonomy, cheapness, anonymity and micro transactions capability.
Competitors utilised this opportunity away from the traditional PSPs who were limited to the monetary and banking regulation and stroked their business seriously as yet.
The next competitors are from the information technology market due to their businesses has kept crowded loyal user bases in interaction such as Apple, Google, Facebook and Samsung. They were entered this market relaying on their customer bases by obtaining PSP permission symbolically and seems willing to earn considerable value added share of market in their pockets.
By continuing current trend some of reasonable consequences waiting for exclusive payment service market owners includes losing marketshare, being bought partially or totally by new competitors and bankruptcy.
Low internet quality and influence ratio to deliver online services, external sanctions and many continuous years if staggering inflation are the main Iranian PSPs’ paralysing reasons due their foreigner colleagues’ years of growth. These troubles in Iranian PSPs’ work field always led to lack of profitability in comparison to the international industry standards, lose of selection chance as an investment case and also lose of independence chance as an Independant business.
Iran’s recently inflation decrease led the banks return to their own business banking and payment services without any need to force them not to interfere in company management field bearing on capital time value utilisation (such as trade and construction businesses)
international political openings for Iran, capability of international banking activities, possibility of foreign competitors entrance and losing efficiency of capital time value game for banks are the main reasons of Iranian PSPs’ challenge in the new business atmosphere.
the competition will be harder for Iranian PSPs affecting by outdated technologies, immature regulatory caused by internal monopoly and external sanctions, monetary service shadow market and finally non-banker companies’ interest to the payment service market.
PSPs’ possible scenarios seems to be:
To keep current monopolised service quality level according to the regulator’s limitation for new technology implementation and foreign competitor entrance
Transfer marketshare to colleagues and not colleagues competitors and shadow market
Bankruptcy and leaving market for foreign colleagues competitors
Partnership or acquisition by foreign PSPs
New technology implementation and service quality level and efficiency improvement
First of all High Council of Cyberspace is responsible for cryptocurrencies and blockchain technology activity regulation in Iran which didn’t approved and announced any result as legal procedure until writing this article despite having an understudy plan declaration. Different news from positive to negative prediction spectrum has been notified as yet.
The second step to implement cryptocurrencies as money and blockchain technology is based on financial regulatory organisation’s opinion namely Central Bank based on Iran’s constitution.
According to lack of subject determination in High Council of Cyberspace and also Central Bank’s very strict and conservative instructions about the other financial technologies such as USSD at least in probability space legal admission is so far and impossible for blockchain technology.
There aren’t any known business accepting bitcoin or any other cryptocurrencies as money or utilising blockchain technology as financial transaction recording infrastructure in Iran at the moment. Also non of Iranian PSPs has declared to have an executive compiled program in this field.
As conclusion just we can say “Not Determined Yet!” such as an intact fruit losing its verdancy slowly. Maybe it’s true to say bitcoin state in Iranian PSPs is zero in an spectrum from negative to positive.