BSV Blockchain recently had the opportunity to sit down with Tokenovate CEO Richard Baker to discuss the new Network Access Rules (NAR).
The NAR is the set of rules regulating the relationship between the BSV Association and the nodes on the BSV Network. They are based on the original Bitcoin protocol rules and those set out in the Bitcoin white paper.
Tokenovate is a UK-based financial services technology company providing distributed financial market infrastructure and smart legal contracts. What sets Tokenovate apart from competitors is that it implements the BSV blockchain, marking a significant leap by integrating blockchain technology into platforms that drive global financial markets.
1. Good morning, Richard. First, can you briefly introduce yourself and explain your role at Tokenovate?
RB: Good morning Ryan. Thank you for the invitation. I am the Founder and CEO of Tokenovate – a UK-based fintech business. So we operate in traditional financial services and have been building a software-as-a-service platform over the last couple of years. That platform is pointed at one major use case in financial services, and that’s in capital markets and the trading of over-the-counter derivatives.
Derivatives are a $1.2 quadrillion market. Everything we think about in our personal lives has some form of risk management or a hedging product sitting over it. So whether it’s money markets with interest rates or fixed income or it’s commodities like grains or ships and how they move around the world, a derivative is used by the asset owner to hedge risk and manage price volatility.
2. How do you understand the Network Access Rules? What are they important in blockchain?
RB: I think they (the Network Access Rules) are really an incredible piece of work by the BSV Association. For 15 years we’ve had the white paper sit as this statement of a format of a protocol and implying how it would run as a network. And we’ve had many builders build the networks, from the mining companies to the node operators to wallet providers.
And really, the NAR for me is a well overdue piece of work that has really taken the unilateral agreement and now expresses it as a set of governance statements and rules. That makes it a lot easier to understand if you are a practitioner, running a node in the market, then you understand your role and your obligations to uphold the governance of the network access rules. So, it’s really good policy work and it really establishes the step in maturity that this technology and this industry has been waiting for.
3. Why are the NAR important for your business?
RB: It’s really important to put the end-user or the customer first. If you put yourself in their shoes when you’re building services and applications you can start to unpick my roles and responsibilities when I’m building technology to try and make sure that I do indeed deliver the expectations of the market or the customer.
So for finance, you know, it’s a systemically important industry. We all rely on our banks, our mortgage providers, and the money systems. We interact with all of that ecosystem every day of the week. But really, do we ever ask, how does all of that work? There’s a lot of complicated plumbing that sits behind what we think about as retail banking or a point-of-sale device in a shop.
Infrastructure matters and within infrastructure having well-planned policies and well-planned governance structures is just critical to the functioning of these ecosystems. The Network Access Rules underpin what is to me the promise of digital ledger blockchain technology operating now as a protocol in and amongst these other messaging systems in these existing networks.
This is incredibly exciting for the society for the next 20, 30, 40, and 50 years when we think about the Internet of Value and how we think about producer-consumer economies of the future with microtransactions and micropayments. We need rules like NAR to underpin that journey.
4. What is the expected feedback from the market regarding the NAR?
RB: So there’s an act coming out of Europe called DORA – the Digital Operational Resilience Act. And there’s an equivalent catchy name by every regulator in the world. But DORA’s cloud computing and telecommunications infrastructure is seen as critical infrastructure. And it’s critical because it underpins commerce, it underpins trade.
I think that side of the industry is going to find the NAR guidelines, these policy instructions, really tangible and really useful. I do expect that they will start to be synergistic with other rules and other governance models that are already in place.
I think equally there could be challenges. Sadly, in 15 years of blockchain technology, there’s also been a parallel journey – and that’s the journey of the rise of crypto. And of course, many in the world believe that that is not for the government to be involved in and that it should be truly unregulated.
But I don’t believe society will ever really be in a position where we will operate a money system without government without some form of policymaking. I think we mix those things up in society. I think governments are inherently there to guide society. And I think we will see that persist for a very long time.
5. Why is the NAR important from a regulatory standpoint? (in the UK and abroad).
RB: I like the drafting of the NAR documentation, mainly because it’s simple and tangible to understand. At the heart of the rules is that if you choose to participate in the Bitcoin protocol network, then you are effectively a node operator and it sets out the expectations of you in how to participate as a good actor in the network.
I think we are going to see this protocol get established in proper networking infrastructure globally. I think that there will not be multiple blockchains in 30 years. I think we will see a few of these blockchains come closer and closer together and collaborate. And at the end of the day, competition always steers the best selection. But in the long term, I think the fundamental protocol is going to get incorporated into Internet networking standards. We will not talk about blockchain technology in 20 or 30 years. It will be part of the common backbone of the planet, and it will just be the way we do digital commerce in the future.
