Blockchains are coming to a transaction near you
This digital currency is revolutionizing the banking industry
You may know it in its most famous incarnation, Bitcoin, but there are thousands of “distributed” or “blockchain” ledgers built or being built, and they just might end up replacing everything from the banking industry as we know it to stock trades and property transfers. That’s not to say the banks are running from blockchains: more like they’re running to them, trying to keep transactions – and clients – in-house.
Very briefly, blockchains share and verify transactions across a network of decentralized computers. Each transaction, or block, is added to the chain, providing an indelible and transparent record. Curtis Stange, chief strategy and operations officer at ATB Financial, doesn’t try to explain the technicalities; he sticks to the business angle. “I describe it in the context of the fact that it’s safe, reliable and transparent and efficient,” he says. “I know that sounds a bit vague and maybe cliché, but at the end of the day that’s what’s important to us.”
To that end, ATB Financial became the first Canadian bank to use blockchain for an international transaction in July, when it sent $1,000 to a bank in Germany in about eight seconds. By more traditional methods, that could take anywhere between two and six business days. Stange sees a day when clients can choose the speed with which they want their money to move, and the cost. “It’s important to separate the currency play of a Bitcoin from the blockchain play,” Stange says. “We’re not interested in creating a currency. We’re interested in the technology that moves anything of value. In this case we chose a bank-to-bank movement of money, but you can move hockey tickets or a contract. You can move anything.”
Author and tech guru Don Tapscott has said blockchain might serve as an alternative to the stock market, to auditing, to social media and to the sharing economy. Stange agrees, but says it comes with some risk. “Blockchain is a bit of a Hail Mary,” he says, “but once banks and organizations get this right, the speed at which it will disrupt will be remarkable.”