Martin Prescott recently joined 2030 Group to lead business development across North America. Based in Canada, he has specialized in blockchain since 2016 and believes Canada has the opportunity to be at the forefront of blockchain innovation. Louisa Bartoszek asked him to explain.
How widely understood is blockchain in Canada today?
Conversations about blockchain in Canada are happening with more and more people understanding its potential. But at the moment, they tend to happen in siloes and within groups of people who are already part of the blockchain community. A growing number of companies have publicly suggested that they intend to experiment with blockchain technology, but very little seems to have come to fruition.
Why do companies appear slow to embrace blockchain?
I think there are many possible reasons, the main being because there is still confusion over what blockchain actually is. Canada is the same as other countries in that those outside the community tend to confuse blockchain, which is a technology, with cryptocurrencies, like Bitcoin, which is a product.
Blockchain is not Bitcoin. It is not crypto. It is a technology.
And with all the reputational issues that go hand-in-glove with crypto, there is a tendency to mistrust the underlying technology. As a result, many have a negative perception to what it can actually do to transform society for the better.
Second, I think there might be some organisations that are wary about the power of blockchain. Viewing it as disruptive (aka bad for their business) rather than transformative (good for their business).
Blockchain is a powerful technology which has the potential to completely transform how businesses operate, how we each shop, bank and even play, online. Making our online experience safer, faster, and easier to use.
It’s all about how you look at it. Ultimately, the technology is maturing and those companies which embrace it the fastest will be in the strongest position to capitalise on its potential. Think of it another way, look at the traditional high street versus e-commerce business model. Which retailers today dominate the market? And which of those were early adopters of e-commerce technology? Which ones no longer exist?
Blockchain is even more transformational than that. Change can be unsettling. Transformational change can be downright scary. But it’s surely scarier to think that your business may no longer exist if you resist the inevitable change which is coming, and coming fast?
Where do you see the greatest potential for Canada?
The potential for Canada is phenomenal with every market able to benefit from blockchain transformation. The number one market in my mind is real estate and for three simple reasons.
1. Real Estate Debt and threats to Canada’s Economy
Canadian household debt is at a record high hitting CA$2.28 trillion in March, representing an increase of 4.6% from the same month last year. Bank of Canada data indicates most of this acceleration is coming from rising mortgage growth.
Canadians have experienced a strong real estate market for a very long time. All the way back to 2003. The question many are starting to ask is are we about to see Canada’s housing bubble burst? With real estate overtaking the oil sector as the largest contributor to the economy, a collapse would have devastating consequences.
The signs are there. It’s a very real possibility. The same large Wall Street investors who made significant sums when the US subprime housing market collapsed in 2008 are now betting real estate values in Vancouver, Ontario and other Canadian cities will collapse.
The fact is Canadians hold too much debt and I’m concerned about the financial future of our citizens.
We are building a new mechanism to unlock trapped equity in real estate through Mozaic Markets and have recently begun the first round of invitations to property owners to buy a voucher to be able to get early access and a discount to the platform when we launch in 2021. Feedback has been extremely positive so far, but the need for education about blockchain is very apparent and in the next six months we will be investing in educating real estate owners who express interest in learning more.
2. Eliminate ‘Snow Washing’ and help the Government to reduce fraud
Snow washing is a term we use here in Canada to describe a type of money laundering. Money entering Canada’s economy illegally and being cleaned, as pure as snow, so it enters our financial system unnoticed.
Canada’s world class reputation for legal and financial governance, coupled with strong global trade links, makes it naturally attractive to bad actors. Canada is not uniquely vulnerable to threats from money laundering of course. All developed markets have the same concerns, whether that be the UK, US, France, Germany and so on.
Blockchain can help policymakers, provincially and federally, tackle nefarious transactions into real estate through providing transparency around the real estate buying/selling process and strengthening Canada’s beneficial ownership regime.
By mandating that buyers and sellers must conduct transactions linked to a blockchain, this would introduce nationwide transparency of beneficial owners for the first time. Significantly reducing the appeal of Canadian real estate to bad actors who can no longer hide through anonymity.
3. Transform the House Buying Process – reducing costs, time and pain
Canada’s house-buying process, like most countries, is complicated and built on an antiquated, no longer fit for purpose, system. Long execution time frames, lack of transparency, inefficient processes involving duplicate steps and many intermediaries, all involving avoidable costs.
Notwithstanding the fact that real estate values, both housing and commercial, can be hard to gauge too with many transactions private. Trusted, reliable and easy to access financial information is scarce.
Blockchain can transform the real estate buying and selling process beyond recognition by providing transparency across the value chain and sharing information which all parties involved can trust.
Through decentralized identity, like that delivered by IDWorks, Distributed Ledger Technologies can provide faster and more accurate verification of financial background checks, verified health and safety records of a building. Along with record-keeping along the transaction process from offer to completion – improving the safety, reliability and ultimately the value of real estate projects. Whilst also significantly reducing costs and execution times through streamlining processes.
What’s next for 2030 Group in Canada?
2030 Group solves real world problems and in Canada, our focus is on finding ways to help Canadians financially and support economic growth for all. Our immediate focus is on helping to unlock capital in real estate which can be used to help financially over-burdened and exposed Canadians protect themselves from a potential property crisis.
We are also looking at how we can help reduce poverty as considering Canada’s wealth and resources, a disproportionate number of Canadians are living in poverty. Specifically, amongst the indigenous people’s where a shocking 1 in 4, or 25%, are living in poverty. This is simply not acceptable. We have ideas on how we think blockchain can help unlock a lucrative new income stream for the First Nations community and hope to share our ideas with them in the near future.
Media Contact: Louisa Bartoszek