Recently, I was browsing through articles on my LinkedIn and came across an article called, In Their Own Words – The Reasons Why the Current, Major Blockchains are not Solutions for the Financial Services. The title intrigued me as I am deeply involved in the blockchain space and was curious as to why the author would think blockchains are not suited for the financial services industry. Reading on, I realized he was writing about the SLOW, INEFFICIENT proof of work (POW) blockchains that dominate the headlines like Ethereum and Bitcoin. What he may not know, and definitely failed to explore in the article is the current wave of third generation blockchains which have not only solved the issues he lists (scalability, speed, efficiency, cost), they absolutely destroy legacy blockchains on all metrics. One of these blockchains is Telos, an EOSIO based blockchain that launched in December, 2018 and is well suited for enterprise level ventures.
Here are six reasons why the Telos blockchain will revolutionize the financial services industry:
- SPEED. The Telos blockchain is able to fully confirm transactions in 3 minutes or less. With changes to LIB and overhead, this can be reduced to mere seconds! This is because the chain is built on top of EOSIO software, and all EOSIO chains have much lower latency than legacy blockchains. You can read more about how the EOSIO software operates here. The result is that applications built on Telos are much faster than those on other blockchain platforms. In fact, users on Telos Built Applications will NOT EVEN KNOW THEY ARE USING A BLOCKCHAIN, because the experience will be virtually identical to using a traditional centralized server. This means that financial institutions will be able to benefit from the added security of using a blockchain without sacrificing speed. Users will be able to send money to another account and have the money show up virtually in REAL TIME. That’s right, no more weekend long delays if you cash a check on a Friday.
- NO USER FEES. Yes, you read that right. While legacy blockchains charge users for transactions, the Telos blockchain has completely eliminated transactions fees for users. The system is also cost effective for developers; the operating cost of running on the Telos network is similar to the cost of running a traditional server. This means that financial institutions can allow users to make micro transactions (imagine sending 1 cent to an account, free of charge). Transaction fees were a major roadblock to universal adoption of blockchain for financial services, but that problem has been solved.
- EFFICIENCY. Unlike other blockchains that run on a POW based software, Telos runs on a DPOS based software (EOSIO) that is 66,000 times more efficient than Bitcoin, and 17,000 times more efficient than Ethereum. This energy savings puts in on par with regular centralized server use, and will allow for mass adoption in a way that first and second generation blockchains cannot.
- SCALABILITY. Telos is able to process over 4,000 transactions per second on its public blockchain, and can process transactions even more quickly when established as a private chain. These numbers are only going to get better. Currently, test environments are adding tweaks to the software and show significant improvements to the speed, and efficiency of the network.
- PRACTICALITY. In order for most enterprise level applications to function there is a need for businesses to have flexibility with their code and software. This is why the Telos blockchain allows for proprietary software to be launched on its public network. Additionally, deployment as a service is available to businesses that need help setting up on the public (decentralized) network or on their own private, Telos based chains. This is a rarity in the world of open-source software, and a big benefit of using Telos. The service educates and provides top-level guidance on the most prudent type of blockchain deployment .
- GOVERNANCE. The Telos blockchain has base layer governance controls built in, that include dispute resolution as a service, code enforced standards for infrastructure partners, elected by token holders through a voting interface, which holds everyone accountable. These controls provide transparent processes and the highest level of security needed for businesses around the world.
So there you have it, six reasons why blockchain for financial services works; Telos will be the blockchain to revolutionize the financial services industry, and enterprise industries in general. Feel free to reach out to me personally at firstname.lastname@example.org; I am happy to answer any and all questions about Telos and its future.
Suvi Rinkinen, CEO, Telos Foundation