The topic of Bitcoin, and other cyber currencies, as well as the underlying Blockchain technology is still top of mind for various industries, with frequent: events, blog posts, articles and sundry news items firmly focused on them. I have also contributed to the deluge with a recently published article in the BCS ITNow magazine, as well as a forthcoming event on the “darker side of Internet technology”, but more on that later.
Last week I attended a BCS London Central event about Bitcoin technology “that could change the world”, featuring Simon Taylor, VP Entrepreneurial Partnerships at Barclays bank. As you might imagine, banks and other financial institutions are at the cross-hairs of any impending / potential disruption by Bitcoin and its Blockchain technology. Given the history of other similar disruptions in other industries, many financial institutions have been quick jump into the ring in order to figure out the best way to take advantage of the new challenge / opportunity rather than just sit back or ignore it.
To this end, Simon did a great job shedding some light on key initiatives by members of the financial services, (including banks and Barclays in particular), on the topic of Bitcoin and other crypto-currencies. My top take-aways from the event include:
- Building Blocks – Bitcoin is great, but platforms like Ethereum have really made Blockchain relevant for organisations to build their own applications – i.e. by providing the Lego building blocks for creating useful applications for the banks of tomorrow.
- FUD still rules – Opinions differ and people argue as to just what is Blockchain. Is it just the underlying technology used for Bitcoin, or does it include other incarnations and applications of similar mechanisms? A lot of confusion is being caused by misconceptions around Blockchain – e.g. “people keep coming up with Blockchain ‘solutions’ for just about anything”. However, if you do use Bitcoin based solutions, you must beware of implications for data protection, Safe Harbour and industry regulations.
- Using a hammer to crack a nut – Simon questioned whether it was really necessary to put up with the immense overhead required for permission-less ‘proof of work’ systems such as Bitcoin, when the faster permissioned versions could be just as effective, albeit with a certain degree less end-to-end security, integrity and non-repudiation capability in comparison to Bitcoin.
- Bitcoin keys can also be lost or stolen – Blockchain does not provide a solution for key management, so How can this be mitigated. This could be a potential role for trusted intermediaries, such as banks.
- Q&A: How can other organisations (e.g. NHS) successfully leverage such tech? – Simon’s advice to the NHS Director in the audience was to get educated on the topic and then experiment like mad. Barclays does this by first creating an experiment script or hypothesis then outsourcing the work to local / friendly start-ups for rapid turnaround. The resulting outcome is then studied and pulled apart by multi-disciplinary experts from Barclays (e.g. compliance / risk / security teams) before a recommendation is made. Most other industries can follow this model.
Overall, I thought this was a good event which was well attended by a very engaged 100 strong audience. The chosen topic and focus also made a perfect setup for the aforementioned BCS “Darkside” event which is scheduled to take place on 26th April, and features some excellent speakers and their perspectives on the seamier sides and uses of Bitcoin and Blockchain technology. Don’t miss it!