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Oil Giant Shell Buys into Blockchain

· January 21, 2018 · 6:00 am

Blockchain technology is no longer limited to innovative startups with grand intentions of changing the world. Massive multinationals are also looking to use the technology to improve their operations and boost productivity. The latest in the lineup to get on board the blockchain train is petro corporation Shell.


According to industry portal OilPrice, the energy giant has bought up a minority share in Gartner-listed startup Applied Blockchain. Details of the deal have yet to be disclosed, but the move will enable the London startup to help Shell explore how the technology might be applied to its business.

oil rig

Blockchain into Business

Operating for around three years now, Applied Blockchain has clients from the banking, telecoms, carmaking, manufacturing, and aerospace industries. This its first foray into energy. The technology is slowly entering into the energy sector with, according to Reuters, a consortium involving Shell, BP, and Statoil already working on the development of a blockchain-based energy commodity trading platform.

Shell chief technology officer Johan Krebbers highlighted the huge potential blockchain tech has for business:

Blockchain applications have huge potential to shake up how we do things in the energy industry from streamlining process, to simplifying how we work with our suppliers and serve our customers. Investing in Applied Blockchain is part of our commitment to use digitalisation to create value in our core business and develop new business models.

blockchain tech

Energy and Blockchains

Shell is not the only energy company with eyes on blockchain technology.  Last year, it was reported that trading house Mercuria started working with banks ING and Societe Generale on the first large oil trade based on blockchain technology. According to analysts, the marriage of blockchain and the oil and gas industry presents a number of opportunities for streamlining and improvements in cross-border payments, record management, supply chain management, and smart contracts as potential applications.

Specialists at multinational professional services network Deloitte stated:

A secure system that mitigates risk, increases transparency, provides an audit trail, and speeds up transactions at a significantly reduced cost may be appealing to oil and gas companies.

As the crypto space expands and more companies develop blockchain solutions, the entire industry will benefit from a technology which is revolutionizing the way the world does business.

Will more blockchain adoption help cryptocurrency markets? Share your thoughts in the comments below.


Images courtesy of Pixabay and Bitcoinist archives.

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Mastercard Blockchain Now Open for Payment Processing

· October 21, 2017 · 8:30 pm

Mastercard has opened up their own blockchain to allow payment transactions to be carried out between selected banks and merchants, but this process uses fiat currency and not Bitcoin or other cryptocurrencies.


Quite a few companies have taken a keen interest in what blockchain technology has to offer, and one of these corporate entities is Mastercard, the massive credit card provider. Mastercard has spent the last few years developing its own blockchain, and now the Mastercard blockchain has been opened up as an alternative method of paying for goods and services. The major difference found in the Mastercard blockchain is that it does not use its own cryptocurrency. Instead, it uses real world money.

Mastercard Blockchain Open for Business

The Mastercard blockchain is now open for specific banks and retailers to use as a payment processing system. So far, participation in this blockchain is by invitation only. The last week has been a busy one for Fortune 500 companies and blockchain technology. IMB opened up their own blockchain earlier in the week. Probably the most intriguing aspect of the Mastercard blockchain is that it does not use its own cryptocurrency, which is something that even the IBM blockchain does.

Justin Pinkham, a senior vice president at Mastercard Labs, says:

We are not using a cryptocurrency, and we are not introducing a new cryptocurrency, because that introduces other challenges—regulatory, legal challenges. If you do a payment, then what we can do is move those funds in the way that we do today in fiat currency.

Why the Mastercard Blockchain Could be Very Successful

Some people may look at the Mastercard blockchain and shrug, but there are some factors in why it could be very successful. The first such reason is that Mastercard is lord and master of a vast financial empire, so to speak. It has a settlement network that counts 22,000 banks and financial institutions from all over the world. Few other entities have such a global reach. Another important factor is that the Mastercard blockchain only uses fiat currency, which reduces costs as there’s no need to convert one form of cryptocurrency into another and then, eventually, cash.

This reduction in cost is also amplified by reducing fees for cross-border payments. Normally, a payment that crosses national borders would have to pass through different sovereign banks, racking up fees with each step. The Mastercard blockchain would remove those steps entirely, thus making the payment less expensive and probably faster. Eventually, Mastercard’s blockchain could be used for other items, such as luxury goods to provide “proof of provenance.”

Overall, this is an interesting development. Could the lack of a cryptocurrency tie-in fire a shot across the bow of other blockchains? One also wonders how the energy use for a single transaction on the Mastercard blockchain compares to current credit card transactions and Bitcoin. A Dutch bank recently reported that the average energy cost for a Bitcoin transaction was 200kWh, and the cost for an Ethereum transaction was 37kWh. By comparison, a credit card transaction only incurred an energy cost of 0.01kWh.

Do you think the Mastercard blockchain will have a major impact? Does the fact that it does not use a cryptocurrency have long-lasting ramifications? Let us know in the comments below.


Images courtesy of Wikimedia Commons, Pixabay, and Flickr.

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