Payments may be the least interesting thing to do with a blockchain
The general fintech consensus seems to be that the blockchain is interesting but that Bitcoin is not. Maybe it’s just fashion.
Who knows? But I’ve always thought that the blockchain is a fundamental technological breakthrough and I’m fascinated to see the emerging use cases.
Well I’ve been trying not to write anything about Bitcoin for a while, having run out of interesting things to say about it, but the nice people at the Financial Times decided to interview me for a piece about the blockchain, so I naturally cannot resist drawing attention to it.
You can see the video here on YouTube [4m 35s], but the main point of my interview was that Bitcoin the currency may, in the long run, be a bit of a red herring. While the virtual currency has been the focus of attention, and its wild oscillations have delivered countless column inches, the use of distributed proof-of-work to maintain a transparent public ledger is actually a fundamental technological breakthough that will spawn a variety of new applications. At Consult Hyperion, we have consistently advised our clients that building blockchain expertise is a useful investment.
“The smart money, according to one developer of a rival system, was never invested in bitcoin directly but in the supporting infrastructure.”
Now I’m not smart enough to image what the uses of blockchain technology might be, but we’ve looked at some interesting possible use cases for clients already and these projects have led me to suspect that the potential is not only beyond payments but that payments might well be the least interesting thing that you can do with a blockchain. This suspicion was confirmed when Michael Manielli from Z/Yen sent me the Long Finance report on the blockchain in insurance. In fact, I thought it was so interesting that I went along and recorded a podcast with him about it for our Tomorrow’s Transactions series.
“Blockchain technology’s main innovation is an electronic public transaction record of integrity without central authority. Beside cryptocurrencies and distributed payment systems, blockchain applications could include areas of finance where a central, trusted third party has traditionally been used, trade reporting, depository receipts, escrow accounts or trade finance.”
I hadn’t really thought much about the use of the blockchain in the insurance world before I read this, but clearly other people have been.
“Leanne Kemp hopes bitcoin will spell the end for diamond thieves. Edgelogic, her Australian peer-to-peer software company, is using the digital currency to create an online record book called Blocktrace, which allows insurers and purchasers to check the history of a precious stone — and what crimes or claims have been made against it.”