Author(s): Peter Bryer
Earlier in 2015, CCS Insight noted the growing interest in the blockchain distributed ledger method of maintaining records (see Daily Insight: On the Block). It's the key enabling infrastructure behind the virtual currency bitcoin, and has been growing beyond these roots in the past few years.
This week, nine of the world's largest banks announced a partnership to create standards for blockchain technologies to encourage its use in financial services. Barclays, BBVA, the Commonwealth Bank of Australia, Credit Suisse, Goldman Sachs, JPMorgan Chase, the Royal Bank of Scotland, State Street and UBS agreed to create common blockchain methods together with New York-based R3, a company that develops technologies for the financial services industry.
Blockchains depend on the use of a distributed database method to keep track of each stakeholder's interest in transactions. The blocks of information are spread across many nodes, meaning there's no central ledger that can be altered, and this results in a higher level of security. Blockchain should also lead to cost savings for the banks by eliminating the need for clearing houses and other overheads.
This goes beyond the world of finance — blockchain technologies can be used for maintaining records and tracking transfers. The likes of the telecom, e-commerce and healthcare industries could ultimately use blockchains to maintain and share their records.
Blockchain is only beginning to appear on the radar for many companies, but its growing importance and long-term potential indicates it's worth exploring. The collaboration of the nine large banking firms from several continents makes this a global technology trend, and the group says it expects more banks to join the consortium over time. Blockchain technologies are disrupting established methods of working with information.