Blockchain is a much-hyped technology. But not everyone’s on the same page when discussing this multi-faceted technology, its applications, and the many startups (and large companies) getting into the space.
Fred Wilson of USV railed against dumb money chasing blockchain and pretty much having no idea what they were going to do with it. The technology itself and many of the startups employing it are still in their infancies.
So what exactly is blockchain anyway? Oak HC/FT’s Patricia Kemp broke it down in simple terms on stage at CB Insights’ Future of Fintech Conference:
“The core of blockchain is … a distributed ledger and … a consensus network: people agreeing on the history in the ledger.”
She explained that part of its power lies in the fact that no one can go back and change the ledger.
Kemp said that while there are lots of use case ideas being bandied about, there are a few she sees as possibly coming to fruition earlier than others.
One is the big data issues within financial services companies. She went on to explain that different financial services companies use different standards for recording movements in different asset classes, which makes communication between them difficult. “[In] public networks…communication can happen quickly. The protocol and the way you’re identifying people and the way you’re communicating is standardized.”
She was quick to add that while this standardization of information sharing and the quality of the distributed ledger records could deliver savings in some areas, it was not as useful in others. She mentioned equities trading as a type of transaction that was already happening in seconds, and that would take blockchain minutes.