Banks struggle to make blockchain fast and secure
As Featured on Ft.com
Blockchain has become the financial markets’ biggest buzzword as banks seek modern ways to resolve old problems. But the technology is overshadowed by questions about how it can be made both secure and fast enough for large financial institutions.
The blockchain concept aims to combine the peer-to-peer computing ethos of Silicon Valley with the money management of Wall Street, automating the networks of trust on which modern finance sits.
Blockchain works as an electronic ledger of payments that is continuously maintained and verified in “blocks” of records. The ledger is shared between parties on computer servers and protected from tampering by cryptography, doing away with the need for a central authority.
Its supporters believe blockchain could cut billions of dollars of hidden costs in the financial system by eliminating inefficiencies and the need for trade insurance. Switching to a blockchain system could speed up services such as global payments, trade finance, syndicated loans and equity clearing.