How Could Bitcoin Reshape the Global Payments Infrastructure?

 Bitcoin News

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The promise of digital currency technology and its potential applications has drawn a number of investors to the ecosystem, each with unique backgrounds and expertise.

For example, bitcoin mining company PeerNova announced in July that it had received funding from Ashar Aziz, a cybersecurity entrepreneur and founder of noted malware protection solutions provider FireEye. Aziz explained in a new interview with CoinDesk that the strengths of bitcoin are most obvious when you look at the infrastructure of today’s mainstream payment systems.

This infrastructure, which he labeled primitive, reflects the evolution of 20th century styles of payment. For this reason, Aziz argued, a new approach has to be taken, and that bitcoin is may be the key to unlocking this future.

Aziz told CoinDesk:

“As we’ve seen over the past several years, more and more of our traditional transactions have moved to the Internet and are leveraging Internet speed for what used to be typical offline transactions. The value exchange is somewhat limited and primitive in their mechanisms, and bitcoin’s underlying technology provides a good, cryptographically secure platform for exchange.”

Beyond payments, the actual procedural aspects of bitcoin could be applied to other types of digital infrastructure.

To Aziz, bitcoin payments are the first application of what may become a litany of additional use cases that fortify the Web’s security for the long term.

Legacy systems out of date

Aziz believes that the various elements of today’s payments infrastructure don’t work fluidly enough to handle the volume of a globalized economy. He called credit card systems archaic and unfit for the digital age, saying that the technological holes make it easy for cybercriminals to acquire sensitive data and subsequently commit fraud.

When asked how digitized payment systems will evolve in the years ahead, Aziz called the situation amorphous, owing to the many companies involved and the complexities in the infrastructure itself. From a security perspective, however, he said that change will have to take place as the stark realities of securing payment networks becomes more apparent.

Aziz explained:

“It’s a large and complex problem. And many enterprises struggle to even understand where their valuable digital assets are, much less effectively secure them. So, if we can shrink the attack surface down to a small set of objects, which can then be very easily secure, that makes the attacker’s job much harder.”

Migration slow but steady

Notably, Aziz said that the companies in the payments space are in a period of research and fact-finding. He called conversations involving PeerNova and a representatives from the payments ecosystem about today’s legacy systems as positive and engaging.

Aziz said:

“The PeerNova team has talked to many people who have looked at other applications that represent value exchange, and are all interested in learning how they can take these traditional mechanisms and create a more secure infrastructure.”

Beyond businesses, Aziz sees the positive shift among consumers – many of whom don’t know too much about bitcoin, much less understand its transaction process – as it gets easier to use. Given the problems dogging legacy payment systems, and the impairments for consumers created by data breaches, he said that those making payments will come to see the benefits that a digital currency-based system would offer.

Yet at the same time, legacy payments systems aren’t going away anytime soon. Given the vast level of investment into modern payment infrastructure, bitcoin won’t have a direct impact overnight. What is more likely, Aziz argued, is that the nature of digital currency will spark a conversation abou how people transact with one another on the Internet.

He concluded:

“I think there are going to be alternative mechanisms coming around, and other things building – you’re already seeing that, systems being built around alternative currency models. I don’t see [legacy systems and bitcoin] competing – I think there’s room for multiple systems to exist.”

Image via Skydeck/ UC Berkeley, Shutterstock

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