I WAS STRUCK RECENTLY when on the same day I met with two very different senior experts in their particular fields.
One, an innovation advisor to the Scottish Government on the better provision of public services, and the other a leader in the finance sector running a large investment management business.
The notable factor was that both were very excited about the possibilities of a new fairly obscure computing technology – one you probably haven’t heard about – which promises to completely revolutionise lots of current processes, and strip huge costs (and jobs) out of all sorts of administration tasks.
It is called Blockchain, the technology that underpins Bitcoin.
Whatever you might think about Bitcoin as a universal global currency, enabling dodgy deals to be completed anonymously and the variability of its convertible value, there is no doubt that the reliability of the currency has never been in doubt.
It’s a bit like the internet itself in that it is not owned by any authority – it is a collective of many independent trusted computerised agents which combine to record and ensure the security of all transactions.
But BlockChain, the technology, could equally easily be used to guarantee the ownership of all sorts of other things as well as virtual currency, and can provide an automatic, fully trusted, incorruptible, proof that a transaction has been made.
To quote famous technology guru Jennifer Aniston: “concentrate, here comes the science bit”.
There are lots of ‘trusted third parties (TTP)’ today who exist mostly to verify the ownership of things: money, contracts, property, IP rights etc.
These include banks, stockbrokers, accountants and lawyers, but also broadcasters, movie studios, subscription services and so on.
Today, the keeping of the record of who has made a transaction with whom is mostly kept in private databases belonging to these various middlemen or traders.
These are private and proprietary.
If you think you have been wrongly charged for something, or some of your property has been misappropriated, you are reduced to taking your dispute up with an individual TTP, many of which are known to give poor customer service: telecoms, power companies, and airlines spring to mind.
The Blockchain is different. It is a network of many trusted, neutral, computers that, for a tiny fee, all agree that a transaction has taken place and record the details, indeed record all the details of all the previous transactions in a way that can never be altered.
This provides a single shared source of reliable truth about the ownership of an object, whether it is money, barrels of oil, healthcare vouchers, or a piece of property.
Just as the internet has eliminated many middlemen, the Blockchain promises to do the same thing with existing TTPs.
Current organisations which exist mostly to provide a trusted intermediary function may find their role largely eliminated, and all sorts of organisations which document which of their customers has the rights to own or use stuff may find that they can administrate this data much more cheaply using Blockchain technology.
The banks have piled in, along with services companies such as IBM and PwC, and many of those have by now set up small teams to build private Blockchains and experiment with the technology.
The bank Santander has estimated that the savings available might be as much as $20bn.
And these savings will be made at the cost of ‘back office’ jobs. Exactly the kind of jobs that the financial sector has in abundance here in Scotland.
Up till now that is.