For decades, finance functions and treasury teams stared down tedious, manual and repetitive workflows.

But today’s financial landscape is in constant motion. Rising regulatory pressures, unpredictable global economic conditions and evolving business models mean finance teams face new, more complex challenges. Traditional tools and manual processes are quickly and increasingly proving insufficient to keep up with the demands of real-time reporting, fraud prevention and strategic decision-making.

Enter artificial intelligence (AI) and blockchain: two technologies that are rapidly evolving, and in blockchain’s sense maturing, to meet the growing demands of finance teams and treasury functions across industries.

For finance teams, AI is more than just a buzzword — it’s an operational game-changer. By enabling automation and data-driven insights, AI systems and applications within accounts payable (AP) and accounts receivable (AR) workflows helps allow CFOs and treasurers to focus on high-level strategies instead of drowning in spreadsheets and manual reconciliations.

While AI drives automation and analytics, blockchain brings a critical layer of trust and transparency to finance operations. At the same time, digital assets like stablecoins can increasingly offer treasury teams the capability to optimize cross-border payments and provide alternative payment solutions, such as for complex commercial transactions or within regions with less stable fiat currencies.

Together, these two buzzy technologies are working to prove their mettle as strategic enablers of growth, efficiency and control in an increasingly complex financial world.

Unlocking Strategic Advantages for Finance Teams

With the news that RLUSD, the USD-pegged stablecoin launched by Ripple, has received approval from the New York State Department of Financial Services (NYDFS) and Tuesday (Dec. 17) becomes available for use, the applications of blockchain-based treasury innovations are top of mind for finance teams looking toward a more efficient and transparent financial future.

By combining the stability of traditional currencies with the accessibility and borderless nature of blockchain networks, stablecoins represent a transactional bridge between traditional methods and newer processes.

After all, throughout history enterprises have been bringing in computers to drive productivity. Blockchain and AI are just the latest iteration of the computational processes and systems long relied upon to drive operational leverage.

“In five years, we might have a blockchain or state-machine capability where financial institutions involved in a transaction can look at that common state and use it as a source of truth to update their own balance sheets,” Tony McLaughlin, emerging payments at Citi Services, told PYMNTS.

Last month, Mastercard’s Multi-Token Network (MTN) connected to J.P. Morgan’s Kinexys Digital Payments to streamline cross-border B2B transactions.

Of course, regulatory clarity sits at the center of the convergence of crypto and traditional finance functions.

Read more: 3 Ways AI Moves B2B Tech From Reactionary to Anticipatory

How AI Is Giving Back Office Operations a Boost

Ultimately, as blockchain and AI reshape financial and payments processes, the role of finance leaders is evolving as well.

“The middle to back office, they’re no longer just a cost center. They’re a value-added partner for everybody within the business,” Meghan Oakes, vice president of customer success at FIS, told PYMNTS. “There are many different aspects of that middle to back office that are now at the forefront of how companies operate …Right now, 20% to 40% of businesses have just started to touch AI. It’s going to accelerate and become table stakes.”

With the news that Google on Friday (Dec. 13) unveiled a platform that provides artificial intelligence agents and AI-powered search to enterprises, the technology’s capacity as a change agent within finance teams is just beginning.

“Many treasurers are thinking, ‘Well, how can I extract that last ounce of juice from my financial ecosystem?’” Ambrish Bansal, global head of liquidity and cash concentration products for the Citi Treasury and Trade Solutions business, told PYMNTS.

AI helps eliminate human error and subjectivity in financial planning. By analyzing both structured data (like P&L statements) and unstructured data (market reports, news), AI models can work to deliver accurate forecasts, helping businesses plan for growth or downturns with confidence.

Among the innovations shared by experts in “Outlook 2030: How Platforms and Networks Will Power the Future of Business Payments,” a PYMNTS eBook, five AI-driven advances stood out: cash flow forecasting, the automation of repetitive tasks, smarter fraud prevention, personalized experiences and unlocking data for richer insights.

As the PYMNTS Intelligence report “60 CFOs Can’t Be Wrong … AI Can Help Accounts Payable” reveals, the effective and responsible integration of AI into financial workflows is just beginning. And the future is bright.

Link: https://www.pymnts.com/news/b2b-payments/2024/why-ai-and-blockchain-are-becoming-finance-leaders-greatest-allies/

Source: https://www.pymnts.com

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But while we hail digital asset ownership as blockchain gaming’s defining feature, most blockchain games today are free-to-play and don’t require asset ownership at all. On top of that, much-hyped promises that rest on the premise of digital asset ownership remain largely unrealized. Apparently, blockchain gaming professionals have found themselves in a curious bind where the best proposition they have for gamers is the same thing they are making excuses for.

Digital asset ownership has always been central to blockchain gaming, offering players true digital property rights to own, trade, and monetize in-game assets in the form of tokens and NFTs. Going back to play-to-earn’s heyday of 2020-21, digital asset ownership was how you could tell the difference between a blockchain game and a traditional game. Early games required players to buy one or more NFTs upfront. But this created a barrier to onboarding, as many couldn’t afford the NFT(s) or simply weren’t enthused about having to buy an asset in a game they didn’t even know they liked yet.

Of course, these NFTs weren’t just any old game assets, they were yield generating. Buying an NFT in a blockchain game was more like investing in a tool that you need to do a job — a job that paid in crypto. Some of the more entrepreneurially-minded NFT owners started renting out their assets to would-be players, in return for a cut of their earnings. It was an amazing demonstration of the kind of decentralized, permissionless innovation that is made possible by blockchain — a community-led workaround that was developed by the players, not the game developers.

Amazing as it was, the rental system which was popular in early blockchain games like Axie Infinity, Pegaxy, CyBall, and others, didn’t actually solve the onboarding problem. The limited availability of assets and high entry costs created a bottleneck, so the rental demand couldn’t be met, thus perpetuating the friction with top-of-the-funnel user acquisition.

By 2022, in an effort to lower barriers and attract a broader audience, blockchain games had started to embrace the free-to-play model instead. With this, blockchain-based features of the game were treated as optional enhancements rather than a prerequisite to play. Players could purchase assets later, or commit time and effort to earn them, but only if they desired. There was no explicit requirement to do so.

The move came at a time when blockchain games were being pressured to focus less on financialization and more on fun. And it was seen as necessary if they wanted to nab a share of the big, juicy $220B traditional gaming market, made up of billions of gamers that were unlikely to install a crypto wallet let alone put up cash for an NFT.

This contradiction — where digital asset ownership is both a defining feature and a significant barrier — reflects the complexities of blockchain gaming’s evolution. On one hand, ownership is what makes blockchain games special; on the other, requiring it deters players. To attract traditional gamers, who lack Web3 familiarity, developers have prioritized accessibility.

Findings from the 2024 BGA State of the Industry Report back this up. When asked about the biggest challenges facing the industry, more than half (53.9%) cited onboarding challenges and poor user experience, while another 33.6% said that blockchain concepts are not fully understood. Thus, without clear, tangible benefits, the effort and cost of becoming a digital asset owner is unjustified. This reveals a major pain point for developers trying to sell noobs on a clunky tech stack that feels more like a chore than a choice, so you can see how they arrived at the decision not to force it.

But this raises the question: How much blockchain can a blockchain game omit, before the blockchain game is no longer a game on the blockchain?

This half-hearted approach to embracing on-chain experiences means that potentially transformative Web3-native innovations — like the promise of interoperability, where players could use a sword from Game A in Game B — remain largely theoretical. Some progress has been made, such as enabling NFT profile picture (PFP) collections to become playable avatars, but this mostly caters to existing web3 communities rather than delivering a palpable benefit to lure the Web2 gaming masses.

True interoperability requires industry-wide collaboration, both technically and economically, which is still fragmented across chains and ecosystems. Meanwhile, developers are sweeping Web3 under the rug, treating it as a layer in the tech stack rather than a defining feature. So for most players, the “Web3” part is hidden, optional, and about as impactful as a collectible spoon in a cereal box.

Frankly, the notion of “ownership” in Web3 is vastly overhyped and largely unsupported by any substantial product-market fit. Web3 ownership, as it’s often sold, is a mirage. The reality is: even if you “own” an NFT, its utility and value often depend entirely on the developers’ centralized infrastructure and ongoing operations. What Web3 does offer is increased agency over your assets, allowing for quicker, frictionless sales. But true ownership? Not so much.

There’s actually little evidence to suggest that Web3 ownership has driven sustainable demand. That said, the ability to exert more control over your digital assets is undeniably valuable — just not the “true ownership” that’s often claimed.

That said, there have been some very promising experiments with fully onchain games and creative catalysts such as the Loot NFT collection. Its composable structure allowed developers to build derivative projects, games, and economies around it without needing approval or input from the original creators.

Other recent innovations born in the arena of digital asset ownership include Ethereum standards ERC-6551, ERC-4337, ERC-404 and soulbound tokens (SBTs). ERC-6551 introduced tokenbound accounts, allowing NFTs to act as their own wallets. ERC-4337 delivered account abstraction, enabling customizable wallets that enhance security and usability without relying on centralized custodians. ERC-404 combined the features of fungible and non-fungible tokens, to offer flexible ownership of both unique and divisible digital assets. SBTs gave us non-transferable, identity-linked assets representing credentials for trust and reputation.

While still early on the adoption curve, these advancements empower gamers to unlock experiences that would never have been possible without digital property rights. And the results of the annual BGA survey confirm that the appeal of digital asset ownership remains strong: it gives players agency, control and value.

The challenge now is to let players experience the fun first and discover the value of ownership organically. But we shouldn’t be ashamed to stand up for what we truly believe in. If we want others to get onboard with our vision, we need to develop experiences that demonstrate the benefits of digital asset ownership from the get-go.

Link: https://www.coindesk.com/opinion/2024/12/19/the-ownership-paradox-why-blockchain-games-have-betrayed-digital-property-rights?utm_source=pocket_shared

Source: https://www.coindesk.com

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Link: https://dailyhodl.com/2024/10/26/theres-a-60-chance-bitcoin-hits-170000-this-cycle-according-to-analyst-jamie-coutts-heres-the-timeline/

Source: https://dailyhodl.com

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Link: https://www.thecoinrepublic.com/2024/10/09/top-5-bitcoin-casinos-empowering-players/?utm_source=pocket_saves

Source: https://www.thecoinrepublic.com

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Link: https://www.coindesk.com/markets/2024/09/19/stablecoins-are-becoming-systemically-important-bernstein-says/?utm_source=pocket_shared

Source: https://www.coindesk.com

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Link: https://www.coindesk.com/markets/2024/08/07/solana-hits-all-time-high-against-ether-outperforms-bitcoin-in-crypto-rebound/?utm_source=pocket_shared

Source: https://www.coindesk.com

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Link: https://crypto.news/will-trump-create-a-us-bitcoin-strategic-reserve/

Source: https://crypto.news

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Link: https://watcher.guru/news/another-bitcoin-rally-to-begin-analyst-explains-what-will-happen-next?utm_source=pocket_saves

Source: https://watcher.guru

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Link: https://coingape.com/ethereum-solana-xrp-record-massive-buying-by-institutional-investors-coinshares/?utm_source=pocket_saves

Source: https://coingape.com

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This guide will explore Schnorr signatures, how they work, their advantages, and their impact on the Bitcoin network.

What Are Schnorr Signatures?

Schnorr signatures are a type of digital signature scheme used in cryptographic systems to ensure the authenticity and integrity of messages.

Claus Schnorr invented Schnorr signatures in the 1980s. Unlike the widely used Elliptic Curve Digital Signature Algorithm (ECDSA) currently employed by Bitcoin, Schnorr signatures offer several technical advantages. 

The scheme is secure and efficient because it is based on the hardness of some mathematical issues in elliptic curve cryptography.

How Do Schnorr Signatures Work?

Digital signatures allow a user to prove private key ownership without revealing it. This is fundamental to Bitcoin transactions, ensuring that only the rightful owner can spend their bitcoins. 

Schnorr signatures follow a similar principle but with a few key differences:

1. Key Generation: A private key is chosen randomly, and the corresponding public key is generated using elliptic curve multiplication.
2. Signing: To create a Schnorr signature, the signer generates a nonce (a random value) and calculates a commitment. This commitment, along with the message (typically the transaction data), is hashed to produce a challenge. The signature is then computed using the private key, the nonce, and the challenge.
3. Verification: The verifier checks the signature by performing a series of elliptic curve operations to ensure the signature is valid and corresponds to the public key and the message.

Impact on Bitcoin

Adopting Schnorr signatures brings several benefits to the Bitcoin network, impacting the network’s operation. Let’s take a look at the most prominent ones. 

Improved Scalability

By allowing signature aggregation and reducing the size of multisig transactions, Schnorr signatures can help alleviate congestion on the Bitcoin network and solve Bitcoin’s scalability challenges. Smaller transaction sizes mean more transactions can fit into a block, increasing the overall throughput.

Enhanced Privacy

Schnorr signatures improve user privacy. In traditional multisig transactions, the individual public keys and signatures are visible on the blockchain. With signature aggregation, it becomes impossible to distinguish between a single-signature transaction and a multisig transaction, enhancing user privacy.

Reduced Fees

Smaller transaction sizes translate to lower transaction fees. As signature data constitutes a significant portion of a transaction’s size, reducing this data helps users save on costs, especially during high network activity.

Improved Security

Eliminating signature malleability helps improve the security of the Bitcoin network. Segregated Witness (SegWit) aimed to address this issue, and Schnorr’s signatures further reinforce these improvements.

Enhanced Smart Contracts

Schnorr signatures enable more complex smart contracts on Bitcoin. They facilitate more efficient implementation of concepts like atomic swaps and Bitcoin second-layer protocols like Lightning Network, which rely on multisig and complex cryptographic constructions.

Advantages of Schnorr Signatures

Schnorr signatures offer several advantages over ECDSA, making them an attractive upgrade for Bitcoin:

1. Simplicity and Efficiency: The Schnorr signature algorithm is simpler and more efficient than ECDSA. It involves fewer complex operations, which reduces computational overhead and speeds up verification times.
2.  Linear Aggregation: Instead of having several individual signatures in multi-signature (multisig) transactions, Schnorr signatures can aggregate into one. This reduces the amount of data needed to be included in a transaction, saving block space and lowering fees.
3. Security: Schnorr signatures offer provable security based on well-understood mathematical problems. They also eliminate certain vulnerabilities present in ECDSA, such as signature malleability.
4. Batch Verification: Schnorr signatures support batch verification, allowing multiple signatures to be verified simultaneously. This can lead to significant performance improvements, especially for nodes processing large transactions.

Challenges and Considerations

While Schnorr signatures offer many benefits, their integration into Bitcoin is not without challenges:

1. Implementation Complexity: Integrating Schnorr signatures into Bitcoin requires changes to the protocol and the underlying codebase. This involves rigorous testing to ensure compatibility and security.
2. Consensus: For Schnorr signatures to be adopted, there must be consensus among the Bitcoin community, including developers, miners, and users. This requires thorough discussion, education, and agreement on the benefits and risks.
3. Soft Forks: Introducing Schnorr signatures would likely require a soft fork- a backward-compatible upgrade to the Bitcoin protocol. Coordinating such upgrades necessitates careful planning and execution to avoid network disruptions.

Conclusion

Schnorr signatures represent a significant advancement in Bitcoin’s cryptographic capabilities. Their simplicity, efficiency, and unique features like signature aggregation offer tangible benefits in terms of scalability, privacy, security, and cost savings. 

As Bitcoin continues to evolve, the adoption of Schnorr signatures will likely play a crucial role in its ongoing development, helping to address current limitations and pave the way for future innovations.

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