The first quarter of this year was marked by two major partner announcements. The first of which was a partnership with a global telecom giant that provides AirPocket access to 100 million subscribers across Latin America. The AirPocket development team is currently working on integrating the first product to be launched with this partnership.

The second partnership involves a leading payment provider in Mexico. AirPocket will be used by the payment provider’s customers to remit money to Mexico from the US – a market that is estimated to be worth approximately US$25 billion. DigitalX has currently executed a Memorandum of Understanding and we look forward to providing more details as the partnership progresses.

Additionally, in early March, we lodged our half-year financial report with the ASX. For more information, take a look here.

In other news, DigitalX Direct has finished integration with our first Publicly Listed customer, Netcents Technology Inc. (CSE:NC) and continues to be an attractive option for institutional and large commercial operators to purchase wholesale bitcoin volumes.

Furthermore, we successfully completed Phase 2 of our AirPocket beta testing last week. This beta tested both the Android and iOS version of the app. As well, this was the first time that Users were able to test the Personal (ie. Peer2Peer) version of the app. Agents in the Dominican Republic tested our streamlined redemption process - which includes Identity Verification of recipient IDs in-app.

We had participants from across 11 different states in the US sending transactions to recipients in the Dominican Republic. We had a very positive response from users of the app (Personal Senders and Agents) as well as from the Recipients. App users rated it 4.59 out of 5 stars (93% rating it 4+ stars), while recipients had a similar positive experience, rating the AirPocket service at 4.58 out of 5 stars (95% rating process 4+ stars).

“Very clear- the design is simple and the app easy to navigate.” - Kristina D.

“I liked how easy it is to send and receive money. I liked how you are able to see a detailed transaction history and find an AirAgent nearby.”  - Martha V.

“This is a no hassle, simple way to send money without having to deal with complicated and expensive third party corporations.” Bill M.

There has been a notable increase in interest from a number of industries to adopt the blockchain into their operations in order to improve security and efficiencies. The press has not only recently reported that the Australian banking sector is looking at adopting the technology, but the Australian Stock Exchange (ASX) is also looking at blockchain. Specifically, Deloitte’s Banking Industry Outlook report estimates that blockchain-based payment systems could equal the volume of the United States' Automated Clearing House (ACH) financial transactions network by 2020.

"[T]he innovation that is possibly the most disruptive of all is blockchain technology" ~ Deloitte Center for Financial Services, 2016 

The move to embrace blockchain by these large financial organisations gives us added confidence that it is only a matter of time before blockchain becomes mainstream – and that will position DigitalX as an industry leader thanks to our first mover advantage.

Growing interest in this field isn’t only coming from financial institutions. Bitcoin headlines in 2016 have been dominated by the blocksize debate due to a surge in demand for bitcoins, which is underpinned by the blockchain. The debate centers around the need to increase current block size so transaction volume does not surpass the Bitcoin network’s ability to process them.

Over the past year, the daily transaction volume has increased tremendously, to the point that the current 1mb block size limit is no longer enough to write all of the transactions to the blockchain in any 10 minute span (ie. the average rate at which blocks are mined as determined by the Bitcoin protocol.  See Figure 1). When transactions can not be processed, a backlog is created. This buildup causes payments to be slow and unreliable, which for a payment network, is a colossal problem.

Figure 1. Number of Transactions per day excluding Popular Addresses (Seven day average)

However, there are solutions to this issue and two competing proposals stand out. The first is a proposal in favor of increasing the block size to 2, 4, or even 8mbs (Classic).

The second proposal chooses not to increase the block size and instead relies on separating out signatures, taking them out of scope of the 1mb limit (Core). Both proposals have pros and cons and it is up to the bitcoin community to reach a consensus as to which method is suitable.

As Bitcoin continues to gain use, whether as a currency or for its underlying technology, new issues and limitations will arise that will require updates and enhancements to the protocol. While some users see these current issues as a sign of the beginning of the demise of Bitcoin, we take them for what they really are - a sign that the technology is spreading and still needs to mature. Too much usage is a good problem to have.

1. Deloitte Predicts Rise in Blockchain-Based Payments
2. Blockchain: Coming to Your Telecom Future
3. Beginners Guide to Blockchain: How to Change the World
4. New Blockchain Apps Revolutionize Conducting Business on the Go
5. 2016 Will Be A Year Of Continued Blockchain Innovation And Experimentation – Report