I was reading Matt Levine’s Money stuff today and was struck by a thought. He writes:
“A national customs agency, for instance, might be happier approving shipments on an auditable open blockchain than in the proprietary database of a particular shipping company.”
This is interesting, but I want to take it one step further. Blockchain or not, a record of events that have been cryptographically digitally signed, with references to previous transactions could be very useful.
If you are a company, and a regulator or agency asks you for your view on what happened, and you give the regulator an Excel spreadsheet or a normal database extract saying “Here’s what happened, I promise”, this is very weak evidence and can be tampered easily by deleting rows, or removing key words like the names of sanctioned countries, etc.
This post tries to describe two very different uses for blockchain technology: Digital Token Ledgers that record ownership changes of digital tokens, and Activity Registers that record timestamped proofs of existence of data or agreements about data. Bitcoin is used for both.
Over the past year I have come across many blockchain ‘proof of concepts’, that take existing business ideas or challenges and apply a specific technical design (blockchains) to the solution. The usual problem/solution decision process has been turned on its head:
This is a win for collaboration, blockchains and the frequently-bashed banking industry. It’s exciting enough to write about at 3am. It’s exciting because it paves the way for collaborative innovation. It’s not a major triumph for technology or blockchains, yet, but it’s by far the best that I’ve seen so far.
It is significant in itself that individuals in nine of the eleven banks have cleared blockchain-related comments with their respective communications departments. That in itself is “positive for blockchains”. Internal processes make it difficult for staff to make even hand-waving vague comments in the real press. So that’s a win.
KYC is a challenge that blockchains are being thrown at (see here, here, here). The premise is “KYC is a headache and blockchains are trendy”. However there is rarely much detail on the problem and insight as to why a blockchain might or might not be a good idea. I aim to explore this use-case more fully in this post.
I am often forwarded news articles of blockchain experiments run by banks or large companies, questioning “Why are they using a blockchain for this internal use-case?”.
Given that a blockchain is meant to replace a trusted external third party, or is meant to create trust between entities who don’t fully trust each other, an internal blockchain seems a contradiction in terms.
However, many of the publicly declared experiments, pilots and proof of concepts have focused on blockchains for internal use cases, ie a blockchain where there may be one or more nodes, but all under control of the same organisation, often within one department.
Although there has been much recent discussion about public (permissionless) vs private (permissioned) consortium blockchains, there has not been much debate on the virtues of internal blockchains.