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Rootstock, a blockchain-based platform for implementing smart contracts, is in talks with The World Bank and other banks in Latin America to deliver its services for the globes unbanked.
Rootstock is now in collaboration with The World Bank Group to help drive financial inclusion and transform conventional finance methods. The company intends to enable banks issue loans from smart contracts using the system.
Rootstock is a P2P platform that is leveraging the capabilities of Ethereum and the transparency and security of the cryptocurrency network.
The co-founder of Rootstock, Diego Gutierrez Zaldivar, told IBTimes the use of bitcoin let the company to concentrate on its current use cases, such as micro lending programmes.
Zalvidar said they have been in negotiations with a number of other development banks, including Banco Ciudad de Buenos Aires, the Brazilian development bank and BNDES, to help bring its services to the world unbanked population. Besides, Rootstock teamed up with the NGO SystemaD, a Latin American cryptocurrency company, to study its use cases in the region.
“Our idea is to target specific needs that we detected in Latin America in different areas and also launch Rootstock with some real use cases; companies and organisations that want to start working on smart contract execution,” he told IBTimes.
“We think it’s key that you have a smart contracts platform that is neutral and is secure enough to run that kind of programme.”
Rootstock is developing instruments to run micro-lending programmes for the unbanked, offering higher level of transparency and lower cost. The company aims to allow anyone with a smartphone to operate the platform. Zalvidar added that the project is anticipated to take up to three years
“It’s more than a technological solution – there is a cultural side to it. You need to explain at a bank how to run a loan from a smart contract. Then you have to have the network that will provide liquidity and will exchange the crypto-tokens for the actual currency of each country.
Instead of using Ether cryptocurrency, he believes bitcoin is the perfect currency for the platform. Although the used coins are in fact bitcoins, the company calls them rootcoins to explain that they are locked in the Rootstock blockchain.
The security model used by Rootstock is a hybrid one, as the blockchain is secured via merged mining and a federation. Earlier models utilized a federation, proof of stake or a mining network.
The use of merged mining eliminates the need for additional hashing power and hardware. It is the process where miners use the same power to secure both blockchains at the same time. The point is to encourage people begin merge mining.
“We made a lot of improvements to our software in order to avoid any loss in profitability by the miners when they merge mine Rootstock. That’s a very important thing because in the past some coins like Namecoin, for example, were dropped from merged mining because they were having a negative impact on the profitability of bitcoin miners,” Zalvidar said.