Should you be following cryptocurrencies?

Should you be looking at cryptocurrencies? What does bitcoin's rise above the Dh20,000 mark mean?
And why should you look for shifts, fuelled by cryptocurrencies, in conventional industries by players like the Hazza Network?
On May 22, 2010, Laszlo Hanyecz, a programmer, paid a fellow Bitcoin Talk forum user 10,000 bitcoins for two Papa John's pizzas. If he had kept them, he would have been Dh200 million richer! May 22 is officially Bitcoin Pizza Day.
Of course, bitcoins and cryptocurrencies are the buzzwords today. Last month's Chinese regulation of Initial Coin Offerings (ICOs), caused bitcoin value to 'plummet' to $2,900 or about Dh10,500. From a high of $5,000 or about Dh19,000 for a bitcoin at the beginning of the month, it's way past the Dh21,000 mark on October 22, 2017. This seems to defy conventional logic. Solid investors sit on the sidelines and provide analyses. In the meanwhile, fortunes are being made and lost.
Now let's talk about the Hazza Network (www.hazza.network). Information is based on research from three independent forums that watch the crypto-currency world.
Isn't it frustrating to go shopping and find that your card or payment brand is not accepted? Because for the merchant it is too expensive or too complicated? This is why in countries as diverse as Germany and Nigeria, cash is still "king".
The Hazza Network aims to displace cash in payments and accelerate financial inclusion by creating a completely new model. The conventional business model for electronic payments is based on taking a charge for each transaction. Which means that each transaction actually creates cost for some entity in the system.
The Hazza Network changes that thinking. Ajmal Samuel, chairman and co-founder of Hazza Network says, "All participants in payments will benefit massively from utilising the Hazza Network. This in turn will drive up the value of the Hazza Token cryptocurrency".
Explaining this, Samuel says that most of the revenues in the Japanese railway system don't come from the sales of tickets. They come from the real estate value of retail at the stations. Similarly, Hazza aims to get more participants to use the network by massively dropping pricing and creating ubiquitous availability for merchants, banks and other entities in payments. To fund this, the Hazza Network is issuing cryptocurrency-based tokens, called Hazza Tokens, to potential participants. The participants buy entry into the Hazza Network and can avail of low cost and highly reduced complexity. And these participants will naturally drive utilisation of the network. In a virtuous cycle, the value of the tokens will keep going up because of utilisation and participation.
By doing so, the platform aims to create $730 billion in savings in the payments industry by 2025. Yes, you read the number correctly. Apparently, if it's business as usual, the payments industry will earn revenues of $1.7 trillion by 2025. One reason for these high costs to participants is that all payment systems, domestic or international, operate as islands. For example, card networks, domestic clearing systems or cash don't interact with each other. The advances in technology create unpredictable consequences. Mobile devices gained from the secular shift to cameras-on-phones, Facebook and Google benefited by replacing voice-and-messaging with advertising as the source of revenue dollars.
The Hazza Network aims to bring about change with a simple three-step approach. The first is to create a single cloud-based superhighway. This connects hundreds of disparate payment islands via open code formats (called APIs) that are the software equivalent of plug-and-play. The Hong Kong-based company and its leadership team have deep technical and commercial experience in the most dynamic payment market globally - East Asia, including China. They have already connected to multiple payment systems globally. So if you're a merchant in Lagos and you want to accept WeChat Pay, in future you could plug into the Hazza Network.
The second step is to take advantage of a by-product of cryptocurrencies - called a blockchain. In a blockchain, each transaction record is noted and stored in the same sequence across multiple databases. And all the databases dance in unison to the same tune. If any one of them is out-of-step, the system has to agree as well as correct itself together.
Blockchains also eliminate the complexity of contracts. All participants will have their contracts present on the blockchain, freely available for any other party to review and agree in real-time. And each aspect of the contract is also managed smartly without human intervention. i.e. "Smart Contracts".
The third is that the participation in the network is via tokens. The sale of these tokens is called an Initial Coin Offering. Participants can enter via buying in the tokens. The more they use the network, the more the value will go up.
Potentially, there could be change in multiple industries as a result of the technology and application of cryptocurrencies. It would be great to get your views on cryptocurrencies and ICOs. Please take the quiz at http://bit.ly/2yIQ8U7.
 The writer is founding partner at BridgeDFS, a bespoke digital financial services advisory firm (www.bridgeto.us). Views expressed are his own and do not reflect the newspaper's policy. He can be contacted at sanjiv@bridgeto.us.