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Welcome to the February edition of the DigitalX Newsletter. In this edition we will take a look at our 2016 Predictions in FinTech.

If you have any questions or comments for DigitalX, please email us at

Company Update

Last year was a success for DigitalX Ltd (ASX:DCC) and 2016 promises to be the most exciting year yet. We are in the prime position to capitalise on what is shaping up to be one of the most dominant fintech themes of 2016 – the adoption of blockchain technology in the global banking industry.

The DigitalX team is focused on and committed to executing the commercial rollout of the Company’s global remittance fintech product, AirPocket, initially in Latin America and the Caribbean during Q2 2016. The rollout will coincide with the move into blockchain technology by the global banking industry.
Market Update

Undoubtedly, 2016 will be a monumental year for the blockchain. To this point, we have seen a flood of predictions in regard to blockchain technology and its potential to disrupt the Fintech industry. The following are our thoughts on the exciting opportunities this year*.

Improvements to Bitcoin Protocol
The Bitcoin network has seen a tremendous increase in volume over the past year, to the point that current artificial limiting factors need to be overcome to ensure continued growth and efficiency of the network. Bitcoin processing is limited to less than seven transactions per second and block size is limited to 1MB. However, there are many competing ideas about how to best solve these issues and the bitcoin community as a whole must come to an unanimous agreement. We believe that implementation of a solution will happen this year.

Launch of private blockchains
Last year was the year that traditional banks and other blue chip companies started to see the potential of the blockchain in earnest. Banks began to initiate research projects to explore how the technology could improve their own operations. While many projects focused on using Bitcoin’s blockchain, others proposed using a private blockchain--whether on top (or to the “side”) of bitcoin or on competing technologies such as Ethereum. Private blockchains allow for tighter control, including restricting view or edit permissions, but are counter to the “open” concept of a distributed ledger. In 2016, we will see many experiments and projects launching on private blockchains.

“Blockchain” will become a consumer buzzword
In order for any technology to take off, it must become mainstream. All of the highly used technologies such as SMS, Wi-Fi and 4G were at one point relegated to experiments (aka research), then accepted by early adopters, before eventually reaching critical mass and mainstream adoption. “Blockchain” will become a consumer buzzword in 2016, on its way to wide consumer acceptance in the next few years.

Governments will discover the Blockchain
While 2015 was the year that banks discovered the blockchain, 2016 will be the year that governing bodies realise the power of the blockchain. Whether it be realising that implementing blockchain technology for property records and smart contracts is more efficient and transparent than current practices or that the technology could improve areas where there is currently inadequate regulation, the blockchain is sure to make an impact.

Consolidation of remittance companies
In any industry, consolidation is the result of maturity. In recent years, there has been an explosion of new Fintech companies, many of whom are involved with remittance.  We’ll start to see the beginnings of consolidation as smaller companies join forces to become stronger. Established players will acquire startups in an effort to avoid the fate of the innovator’s dilemma. As described in Clayton Christensen’s famous 1997 book, the innovator’s dilemma is the idea that established companies fail to meet their customers’ future needs as they are too focused on current needs. So the incumbents leave the door open to more nimble and innovative startups that can anticipate those future needs.

* Please note the above observations are neither endorsements nor guarantees, but simply our opinion of what we see as forthcoming in Fintech this year.

Blockchain in the News
  1. Australia's Biggest Stock Exchange is Taking a 'Close Look' at Blockchain
  2. Why Insurers Caught the Blockchain Bug in 2015
  3. 2015 Was the Year of the Blockchain
  4. The Stories That Shaped the Blockchain Narrative in 2015
  5. What Banks Should Be Doing With Blockchain in 2016
  6. Deloitte: Blockchain Will Disrupt Your Industry
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