Blockchain has the potential to disrupt business sectors left and right, but finance is definitely at the top of the list.
It makes sense, of course, especially once you understand the promise of blockchain: a distributed, trusted, shared ledger providing transaction accuracy and asset provenance. In addition to Bitcoin, other exchanges like Ripple and Ethereum are poised to offer alternative finance solutions.
However, this industry – not unlike others – will always need to balance the risks. As other options appear, the finance sector can evaluate the promise of blockchain with even more consensus models while giving up some complete decentralization. That’s especially true now since the creation of private, permissioned blockchain networks for business and with the advent of hybrid blockchain models that blend the best of both public and private blockchain networks. This technology will enable the finance industry (among others) to reap the benefits while minimizing some of the current negative characteristics, such as performance.
Opportunities for finance
“Fintech” is a popular term we all hear a lot, used primarily to describe emerging tech (along with processes and procedures) that advance the financial industry in some way. That list usually includes advances such as robotic process engineering, data-driven processing, and AI; however, blockchain really sits atop that list and has the potential to impact the entire fintech landscape.
Now, with the creation of Smart Contracts, this peer-to-peer powerhouse is ready to change finance in the same way email changed the way we communicate for business.
Blythe Masters, CEO of Digital Asset Holdings, a fintech firm building distributed ledger technology for financial services, sums it up well:
“If you think about any multi-party process where shared information is necessary to the completion of transactions, and the coordination of activity and the exchange of value, that's where blockchain technology can be put to good use.”
Here are some of the various ways I see that blockchain can apply to fintech:
In my role with Veracity, I’m fortunate to be on the front lines where I can observe and engage as this technology evolves and expands. As the biggest tech firms and the smartest technologists focus on advancing the blockchain, areas like fintech will be the beneficiary.
The future I see is a world where blockchain makes it easier to manage our finances. In addition, as banks and finance companies operate at lower costs, consumers should be able to realize some of those savings.
And in today’s world, anytime the consumer wins, everyone wins.
Mike Talbot is president of the Overland Park, Kan., chapter of the Government Blockchain Association (GBA) and the vice president and chief technology officer at Veracity Consulting, a tech consulting team of problem-solvers and truth-tellers who deliver customized IT solutions for commercial and government clients across the U.S. Learn more at veracityit.com, and share your thoughts on Facebook or Twitter @engageveracity.