Blockchain may be one of the most hyped terms in business technology, but for good reason - blockchain is proving to be a huge disrupter across most business sectors and industries.
Blockchain, which was created by an unidentified individual, or group of individuals called Satoshi Nakomoto, has its origins in Bitcoin and other digital currencies. Whilst much of the excitement surrounding digital or crypto-currencies has been largely centred on the prospect of getting rich quick, it is the underlying blockchain technologies that companies and governments are sitting up and taking notice of.
In its simplest form, blockchain is a ledger that logs every digital transaction relating to an asset (which could be anything from electronic money, to medical records, to diamonds). The transaction information is appended to a permanent block which is added to a distributed chain of transactions in a way that makes it all but impossible to manipulate once recorded and verified. This approach allows digital transactions to take place without involving a middleman (i.e. bank), and instead relies on a peer-to-peer network to collectively validate and timestamp every ‘block’ that is added to the chain. This offers a huge degree of traceability, security and speed – and ultimately a much less expensive way to facilitate transactions.
It would be fair to say blockchain is introducing a new kind of ‘open financial integrity’ which will revolutionise business practices as we know them.
At Equiniti we know that blockchain will shake-up the payments industry and we’ve invested significant Research & Development into the technology to properly explore its potential. We’ve developed some first generation proofs of concepts to review the applicability of the technology; to validate the processes involved; and to explore how we can make transactions more secure and traceable for our clients. We believe that our Share Registration clients will be positively impacted as we start to offer real-time verification and traceability on financial deals, making the entire process faster and even more secure. The simplification and speediness of automation and transactions that blockchain can bring to processes will also radically impact how International Payments, Smart Contracts and Clearing & Settlements are conducted within the financial industry.
It’s interesting to note that blockchain technology is also being utilised by non-Financial Services industries, such as retail and food. These sectors see it bringing more transparency to supply chains allowing traceability right back to the point of origin. These applications are making day-to-day processes more efficient and giving the consumer peace of mind about what exactly they are purchasing.
As blockchain technologies continue to be embraced by companies and governments, business processes will evolve and new industry standards will be set. It will be a while before we realise the full potential of blockchain, but the prospect is an exciting one.