Blockchain Set to Reshape Finance, From Private Networks to Public
The financial sector is on the cusp of a revolution, with blockchain technology poised to reshape its landscape. While the first German start-up to harness this power in 2020 remains unidentified, notable international examples like Figure Technologies and Digital Asset have already made strides. As the technology evolves, it promises secure asset tracking and transfer, from money to contracts.
Blockchain's journey in finance will likely begin with private networks, overseen by a central authority. This approach allows for a gradual transition, balancing innovation with regulatory compliance. As the sector progresses, laws and standards will be crucial to govern its growth and ensure interoperability.
At its core, blockchain creates a shared digital ledger, replacing traditional databases. This innovation enables secure recording and movement of various assets, bolstered by network consensus, cryptography, and clever coding. Each block, uniquely and securely stored in a distributed database, forms an unalterable record.
Governance will be a significant challenge. Balancing decentralisation and control, while maintaining privacy, will require careful navigation. However, the future also holds promise for public blockchains with anonymous participants, further expanding the technology's potential.
Blockchain's potential in the financial sector is vast. As the first wave of applications takes shape, the focus will be on private networks. However, the long-term vision includes public blockchains and anonymous participation. With laws, standards, and governance structures in place, blockchain could revolutionise how we manage and move assets, from money to contracts.
