On October 13th, Mihai Ivascu, Modex CEO and Co-founder, was one of the speakers at Forbes’ reINVENTing Romania virtual event themed “In which industries can blockchain technology be used?”. Here’s what Mihai had to say about blockchain, the future of this revolutionary technology, but also cryptocurrencies and regulations in this domain.
After a brief overview of blockchain technology, how it works and how blockchain-based transactions take place, Modex’s CEO touched upon the industries where blockchain is currently used, but also where it could be used in the future.
“Blockchain can make a difference when it comes to the reporting area, for instance. Let’s say you are a regulator (insurance, banking sector, telecom and other highly regulated industries) and you collect data. How do you collect data from companies reporting to you? Manually. Each company, including in the United States, is reporting manually. Based on this reporting a check is done, then the process goes back to the company which is reporting. There’s a high risk that the respective data can be modified during these phases of the entire process”, stated Mihai Ivascu.
Modex’s CEO explains blockchain’s main points at Forbes event
- Eliminating risks with a blockchain-based network
“So now we have a direct reporting mechanism. Basically, all the data leaves the company that must report it and is synchronized, through a private nodes network, directly to the regulator. Through this process, nothing can be modified in the internal database or along the way and everything is reported in real-time.”
Ivascu added: “We have cases of massive frauds in the insurance segment because document numbers, or instance, are left unprotected (they are visible for free). There’s a belief that in a centralized database, everyone who has access to data holds the truth. Therefore, money might go in the wrong direction, as well as sensitive data. There’s a high probability (and in some cases this happens very often) that certain people would like to modify some reports to do massive frauds.”
“If you operate with a blockchain-based network, these risks are eliminated. And you can clearly monitor data versioning, so you’ll be able to see who has modified a certain field with a bad intent at 2 AM and in the morning that field is modified again by the same person, but with a different value. Everything related to unilateral access to a centralized database and data manipulation can lead to massive and numerous frauds.”
“Therefore, I’m sure that in the next few years regulator from banking, insurance and other fields will implement advance technologies to better monitor those processes. Moreover, blockchain can also be used to highlight transparency in the way governments or public sector institutions are spending public funds. Thanks to blockchain technology, everyone can see a public journal of those transactions and trace where the money went, for which purpose”, believes Modex’s CEO.
- Disrupting healthcare and the financial industry
“Currently, Modex is doing several pilot-projects with multiple financial institutions on the global scale to implement such a cutting-edge reporting mechanism. Blockchain can also make a huge difference in healthcare, and Modex has a project in Africa which will debut in December: electronic medical records for children.”
“Unfortunately, around 5 million African children are dying as there is no clear traceability in the vaccination chain. Thanks to our tech solution, parents will be able to upload into the system the vaccination history. This is useful not only in Africa, but also in Europe and the rest of the world. Ask anyone if he / she has a detailed and clear track-record of their vaccination history and you’ll see that it takes 2-3 days or more to gather complete data related to this. But when have all this info placed in a medical wallet, you’ll have not only traceability of what happens to your data, but you can also be part of various research programs.”
- Being the true owner of personal data
“We’ve developed such a solution for a Canadian partner. How it works? A medical company would come to you and say: “I have 828 dollars for each of 1,000 teenagers aged 20-30, who smoke one pack of cigarettes per day, from the British Columbia area. I need this data for research, that’s how much we can pay.” You, as a college youngster, will then receive an SMS saying that this company would like to buy your medical data for 828 dollars. Do you accept or not? For companies doing medical research this is a good tool to obtain relevant data, for users – they become the owners of their data, and an entire business model is created.”
“If you want to make extra money, you make sure that all your medical analysis is up to date, the medical companies also win, everybody wins. This is not happening currently; you aren’t the owner of your medical data. The moment you leave a medical facility, your data might go out everywhere. The fact that you’re given a paper upon check-out from that facility doesn’t mean we also own our data. So that’s a paradigm shift we’re speaking about which will soon become normality. I believe it’s only a matter of time until that happens on a large scale as everybody benefits from this.”
Will cryptocurrencies become normality?
“For sure. Let’s look at the numbers. Two years ago, there were 5-6 million cryptocurrency owners worldwide. Today, that number has grown to 300 million. I am sure that the cryptocurrency sector will evolve in the coming years but – just like with the evolution of the Internet – 99% of the projects on the market will be fake for various reasons (fraud, incapacity to execute, team break-ups, etc.). However, the remaining 1% will be transformational for various industries and I’m confident we’ll see spectacular results from these projects in the 1% range. Therefore, individuals must be very careful when investing into cryptocurrencies as they can bring substantial losses, not just winnings.”
Regulating cryptocurrencies in various countries
“If we look at China, we’ll see that the government has only banned mining and the active marketing of cryptocurrencies within its borders. China hasn’t banned cryptocurrencies, as many media outlets have stated. You can own cryptocurrencies in China. Let’s move to El Salvador, where some have said that Bitcoin has become the only legal tender. Wrong! Bitcoin has been officially accepted besides the traditional forms of payment available until now. I strongly believe – and our company has been pushing for this since 2017 – the issuing of cryptocurrency should be regulated. If you have a strong framework to validate a company, there are 187 points which need to be fulfilled by that company in order to receive a financial license to operate a Distributed Ledger infrastructure.”
Mihai concluded: “If that framework would be perfectly implemented in every country, even in copy/paste format, the fraud rate would go down by 99% as there’s a high cost of entry. If you want to get in this sector, there’s a well-defined capital requirement, personnel, technology, audit, internal expertise and so on; there’s an entire procedure that needs to be taken. Therefore, I think that the area where increased attention is required is when generating cryptocurrencies as this is the source of 99% of total frauds.”