Bitcoin has been around for over 7 years now. The decentralised cryptocurrency gained notoriety as the currency of choice on a number of online black markets such as, the now defunct, Silk Road. The shady image which attached to Bitcoin has, until recently, caused those in the Financial Services Sector to overlook the extraordinary potential of Blockchain, the technology which underpins it.

In essence Blockchain is a shared, trusted, public ledger that everyone can inspect, but which no single user controls. It relies on a network of computers, all of which must approve a transaction has taken place before it is recorded, in a “chain” of computer code. Banks and other financial institutions are now beginning to comprehend its potential. In a recent report, published by Satander Innoventures, entitled “The Fintech 2.0 Paper”, it was suggested that Blockchain technology could save banks’ infrastructural costs by €15-20bn a year by 2022. It is suggested, in that report, that in time, distributed ledgers will support ‘smart contracts’ which are computer protocols that verify or enforce contracts. This will lead to a variety of potential uses in securities, syndicated lending, trade finance, swaps, derivatives or wherever counterparty risk arises.

Even the Bank of England concluded, in a research note published last year, that distributed ledgers are a “significant innovation” that could have “far-reaching implications” in the financial industry.

The below article describes the fervour by which financial institutions are now embracing Blockchain, and also sets out just some the possible applications of it.

The revolution is already underway!!