Lexology, an aggregation service for law news, has published an article by Osborne Clarke’s James Brownlee entitled Blockchain in finance: what are the most promising uses?. It’s a well-thought out and researched piece. Blockchain is very much in the spotlight at the moment, from it using more electricity per day than the country of Ireland to its price tipping the $15 000 level (someone say “South Sea” or “Tulips” or hackers?) but I still find myself not really sure of its use and utility. The article gives a good rundown on how the finance sector thinks it can use blockchain which I found helpful in understanding how blockchain could be applied to other sectors.
Mr Brownlee has analysed the most promising use cases within finance and boiled down the common features of these to a gang of four:
- “The involvement of one or more intermediaries: The blockchain solution effectively dis-intermediates those intermediaries (…);
- The requirement for (or potential benefit from) a shared repository of information: blockchain being used as a ‘golden source’ of information (…);
- The requirement for (or potential benefit from) having multiple parties able to initiate or contribute to the same transaction: for example, a payments system needs to facilitate millions of people transacting with their banks (…);
- Finally, the existence of a lack of trust between participants in a transaction: in scenarios where transacting parties are not well known to each other they often impose layers of verification (often via an intermediary) or collateral requirements to protect against non-performance. Where such lack of trust is a factor, blockchain can replicate trust cyptographically and in doing so streamline processes and reduce costs.”
The features he isolates will no doubt be applicable to other industries so I shall keep a note of these.
As I move countries and disconnect myself from all my current country entanglements whilst seeking to create new entanglements in my new place of residence, I can’t help wishing some of these use cases were already available. The “shared repository of information”, “lack of trust” and “one or more intermediary” attributes exist in almost all of the things on my to do list. However, I will have to wait. According to Mr Brownlee’s forecast, however, this need not be too long:
“Will 2018 be the year that many blockchain finance projects move out of the test environment and into the real world? It is certainly looking that way.” (my emphasis)