A little bit about The Blockchain Conference at The Escalator, a Fintech event.
So I trundled off to this event all about the infrastructure that exists to facilitate the use of Bitcoin and the like. There were a few different explanations of what these Blockchains are and they conflicted a little, but one speaker likened them to Blockchains being the internal combustion engine which enables all sorts of types of cars (Bitcoin being one) to actually do their stuff. I’d say that Digital currencies are our cars, vans, buses, trains, trams etc all running on various (Roads, rails) Blockchains if that makes any sense at all!
There was a fair amount of pretty dull and not useful stuff, and a lot of selling going on, even by The Isle of Man! (See pic). But here are a few really good things that I gleaned:
- - The Isle of Man has created a great regulatory and technical infrastructure about ten years ago to attract gaming companies such as Poker Stars. As this has such a link with digital currency, they are now on the case with that. ‘Isle of Man is the new world for Blockchain technology.’
- - Lee Braun from the Innovation team at Barclays talked of how Bitcoin only does 2.7 transactions a second at the moment. Visa does 50k. BUT, he sees it all as ‘ a design space that is slowly being filled out’; start-ups, Barclays Accelerator and so forth.
- - He also spoke of how Barclays are looking for inspiration and guidance from start-ups and so forth. But there was a question about lots of Start-ups being a SOLUTION LOOKING FOR A PROBLEM and there is a bigger picture to look at than that.
- - Banks can save huge amount of costs using digital currency because:
- ~ Back-office, clearing creates many duplications of effort.
- ~ Blockchain can consolidate things and provide efficiences with The Bank of England keen to pass the savings onto customers.
- ~ Start-ups should focus on WHERE TO ADD VALUE WITHIN THE CURRENT BANKING PROCESS.
There then followed three talks from start-ups in this digital currency infrastructure space:
1) Elliptic – they help to safeguard enterprises interactions with Blockchains by basically mapping everything that has ever gone on and now is going on within these chains (for Bitcoin at least). They look after the keys you need to do use the currency, and try to spot anomalies that could be Money Laundering ( as there are not Anti-Money Laundering systems as such in the largely anonymous Bitcoin world). They flag say sudden sales of large amounts etc. Or ‘mixers’ and ‘tumbling’ – putting amounts of coins in and getting different ones out, which could be legit anyway but are probably what a new series of The Wire would use.
2) Coin Services
Bitcoin is not yet fit for large financial enterprises in their opinion.
WHAT DO BANKS WANT?
- ~ A Private Ledger
- ~ To control capacity and cost
- ~ To have designated miners only ( ask me what a miner is and they can be Manic:)
- ~ Collective admin
- ~ Focus on their assets
- ~ Hide and secure transactions details
So they provide private Blockchains that enterprises can create and then have more control over.
3) Nicolas Carey – Founder of Blockchain
That’s his company name. Blockchains are also all the other roads run by other people too. (Confused yet? Still reading? Nice one:)
- ~ A technology
- ~ A protocol
- ~ A network
- ~ A currency
You download the software, create a wallet with a public address to share. The transaction is sent via this address on the Bitcoin network.
First transaction was 10 coins for 2 pizzas. These 10 coins would now be worth 3 million. (Blimey!)
- ~ 130k transactions today.
- ~ Not everyone has access to banking and financial services. SO DIGITAL CURRENCY MIGHT NOT CHANGE US HERE IN THE UK OR THE US JUST YET BUT MIGHT IN ARGENTINA FOR INSTANCE.
- ~ 3.7 million users.
- ~ There is now a massive security risk and miners spend an awful lot of money protecting there substantial share of Bitcoins. Serious money. It’s no longer in the realm of bedroom enthusiasts for sure.
Was it worth going? Yes and thanks Fi for the ticket.
Digital currency is going to affect our clients in some way or another and has of course the potential to be a big thing. The banking regulations are key of course. And I got the impression that Bitcoin could be the Netscape of this age, quickly overtaken by IE (horrible) and Firefox ( a Godsend!)