Propel your FinTech ambition
By Kirsty Maxey on Tuesday, 30 May 2017
Recognising how your communications need to change to grow your fintech proposition, our Propel solutions have been specifically tailored to provide powerful, agile support whether you are transforming a traditional business, or just starting up.
To fire your FinTech ambition, read our thoughts on what blockchain means for communications and brand storytelling. For us, never before has clarity on brand purpose been so necessary.
To find out more about our Propel solutions contact us on 0207 360 7878 or email email@example.com
Blockchain is FinTech’s major new buzzword. But what exactly is it, and what difference is it going to make?
The concept of blockchain was first postulated in 2008 by the mysterious Satoshi Nakamoto (not his real name, although there is plenty of speculation as to his true identity) as the open-source software behind the cryptocurrency Bitcoin. It was designed to make transactions quick, cheap, easy and most importantly, trustworthy between people who didn’t know or trust each other on the dark side of the Web.
Like a crowd-sourced book-keeping ledger, the blockchain is a decentralised digital platform that records ownership and transactions, who has paid who (although identities are anonymised as ‘keys’), how much and when. It uses duplicated ledgers across a variety of servers, meaning if one is compromised the data is still intact.
When the parties involved sign-off a transaction, details of it are sent to every computer (or ‘node’) in the Bitcoin network, where it is simultaneously and independently verified by applying an algorithm known as a ‘puzzle’. This is the equivalent of having a group of independent witnesses to a single event. Nodes that perform this authentication function are known as miners and are rewarded with Bitcoins, as an incentive to keep the blockchain going and the system operational.
When the transaction is verified, the data is coded using complex cryptography which means it cannot be changed or erased once it’s added to the blockchain. Over time, as the blockchain grows, and as more nodes join the network, so does the assumed strength and security of the system. Whilst ‘the’ blockchain is all about bitcoin, the processes and principles of it are being adopted by a wide range of organisations and institutions, from financial services, health and transport to manufacturing, computing, legal and professional services and retail.
They are looking to private blockchains, also known as Sidechains, to which a limited number of people have access but which work on the same principles and deliver similar benefits. According to Chad Cascarilla, CEO of New York-based blockchain and Bitcoin company itBit: “In a public blockchain, you’re trying to get everyone all over the orld to agree to changes at the same time. In a private one, you’re not. You’re really ust saying you trust everybody that’s on that network because you’ve all agreed to join it. You don’t have these same computational issues that you do when it’s public.”
Accenture has debuted a prototype of an ‘editable’ blockchain for enterprise and permissioned systems. The consultancy is seeking a patent for its ‘chameleon hash’ technique to allow a central administrator to edit or delete information on a blockchain, which would be used in. Whilst this has angered purists who argue that immutability is a fundamental tenet of blockchain, Accenture argues that some form of editing is essential for cases such as the ‘right to be forgotten’ legal right, human error and illegal actions.
Every business which relies on probity, privacy and security for its reputation and its regulatory compliance will have a blockchain project in the pipeline – or at least be taking it seriously at the highest levels of the organisation. That includes every multinational bank, the consultancies and the global investment community, which in 2015 invested a record $13.8 billion in fintech, of which $474 million was in Blockchain and Bitcoin start-ups, according to a joint report by KPMG and CB Insights. What is particularly interesting is the speed at which the banks have come together to agree that blockchain is the way forward, and are collaborating around standards and best practice.
Chad Cascarilla - CEO of itBit
Why blockchain is so exciting
The reason why blockchain has created such huge interest is because it offers the promise of addressing some of the key challenges and pain points experienced by organisations who rely on their record-keeping to be trusted by their stakeholders, or who use trusted third-party authorities as the arbiters of transactions.
Blockchain is often referred to as a ‘trustless’ technology, because the concept of emotional security has been replaced by mathematical certainty. A blockchain-based ledger makes it much more difficult to tamper with transactions or records, meaning it can reduce fraud or identity theft and enable regulatory compliance. It can help to reduce reliance on third parties acting as middle-men, meaning it can speed up transactions and reduce processing costs. It delivers greater transparency because all parties to the blockchain have shared access to the data on it, so it can prove the provenance or authenticity of a product, or an item in a supply chain and provide a traceable record of ownership.
- Reduced fraud and theft
- Less reliance on third-parties
- Faster transactions
- Reduced processing costs
- Greater transparency
- Increased trust
- Fewer disputes
If you want to propel your FinTech ambition or simply find out more about what the future might hold for you and your business, it’s a must read.