One of the most crucial movements in modern cyber-security is invisible. You can’t see blockchain but soon you’ll probably be using it. Some optimists believe it might be the future of online banking.
Cyber-security is the keyword of the age and blockchain is at the centre of it, it could be both a route for hackers to get your information and a way for you to manage your money and grow investments, while saving the world from cyber-criminals.
So what is it? In simple terms blockchain is a database that keeps an ever-growing list of records called blocks. Blocks are linked up and timestamped and the blockchain is not attributed to a single device, so can be used by multiple users.
Once data is recorded it cannot be modified. This means it can be used to safeguard the banking industry: each transaction is registered as a block, and any time there is something remiss, the system is notified automatically, without the need for third-party security. Santander has estimated that it could save banks up to £16 billion in admin costs and last month Blockchain — a start-up named, confusingly, after the software for which it exists — opened a new, bigger HQ in Shoreditch.
David Cameron was invited to open the building. Last year, his administration oversaw a trial of paying benefits using blockchain, transferring the money directly into accounts.
“Fundamentally, it’s a database,” explains Blockchain CEO Peter Smith. “And the first thing it’s going to do is fundamentally change financial institutions, by making them more efficient and faster.”
He gives an example of paying for something in a café. “You use your card. Your bank sends money to the café’s bank, and two or three other financial institutions. Three days later the money arrives. It’s expensive. Blockchain is like digital cash —
like giving you a tenner from my wallet. We’re replicating that in the digital world.”