Blockchain: The Tech at the Heart of the Future of Finance

If you want to talk about a big trend that began taking shape in 2016, look no further than the state of cash — the pace at which currencies across the globe were challenged or devalued accelerated in the past year.

The stage is now set for even greater momentum: In 2017, there’ll be a global sprint toward digital currencies.

Sweden — where barely 2% of all payments are in cash — is leading the way.

Government-orchestrated demonetisation efforts in India, Britain, France, Austria, Belgium and other countries are also fuelling the cashless movement.

Ranging from eliminating some currencies, to negative interest rates on cash deposits, to assigning fees to cash payments and more, the war on cash grows in reach and intensity.

And so does the growing investment in the technology needed to support a digital-currency world.

Debit cards were our first big step toward a cashless economy…

…Blockchain technology now lies at the heart of the second step

Groups ranging from Wells Fargo to the London Stock Exchange are getting ready for a blockchain-based future.

You should, too.

Perhaps as early as next year, your bank or investment manager could be managing your money with blockchains.

But blockchains will reach beyond banks — it’s good for much more than logging payments. They can be used to validate the security of anything with value.

Gem, a blockchain entrant, has partnered with Capital One and healthcare giant Philips to smooth and speed payments for medical insurance claims.

The Cambridge, Massachusetts, company Learning Machine has partnered with MIT’s Media Lab to create a blockchain that stores and verifies academic degrees and professional certifications. A college graduate can store diplomas and certificates electronically on a smartphone.

In June, the US Department of Homeland Security gave a $199,000 grant to Factom, a company in Austin, Texas, to figure out ways to use blockchain designs to maintain the integrity of the ‘internet of things’.

With every device connected to every other one through the internet, the potential for hackers and malware skyrockets. Blockchains may be a new tool for cybersecurity.

And with a grant from the Bill and Melinda Gates Foundation, Factom is setting out to apply blockchains to secure electronic medical records as well.

It’s not only about keeping snooping insurance companies from prying into your health history.

There’s also the problem that medical records in developing countries or remote regions aren’t always accessible — and sometimes not updated quickly. Blockchains resolve those problems.

Using the blockchain’s options, people could decide who may see their medical records. People could even have ready access to their own records, instead of wrangling with a doctor before getting a look.

Given the US election’s continuing turmoil, blockchains are also drawing attention as a way to validate vote counts.

Fake news and claims of voter fraud, even unsupported, destroy the trust at the heart of democracy. Blockchains’ power to validate transactions may be an antidote.

The Follow My Vote project advocates a vote-by-blockchain approach, and is marketing software that makes it possible. Each vote would be a ‘transaction’ recorded as a block in the chain. Each voter would be given a unique access code that would let that voter follow the progress of his or her vote through the ballot box to the final vote tally. Votes would still remain secret unless a voter shared that unique access code.

The possibilities are vast when it comes to this up-and-coming technology. But there are undoubtedly bumps along the blockchain trail.

First, blockchains are progressing so rapidly that the field is desperately short of skilled coders and developers.

In addition, advocates point out that, in these heady early days, enthusiasm for blockchains outstrips their usefulness. Not every project will benefit from blockchains; many will fail or be abandoned.

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Source: Blockchain: The Tech at the Heart of the Future of Finance – The Daily Reckoning Australia