‘It’s Going To Change Everything:’ This Technology Could Upend Financial Industry
Microsoft’s Azure cloud team is used to working with IT departments. Lately, though, they’re being approached by executives in the C-Suite because of a new technology few of them understand.
“It’s really disruptive,” Matthew Kerner, a Microsoft Azure program manager, said. “It’s no wonder the conversation we’ve having with our customers is changing.”
Blockchain – the technology behind digital currencies including BitCoin – is an online ledger system that allows users to make and verify transactions without going through, for example, a bank. It’s a term that’s easy to overlook, or even make your eyes glaze over, but the technology could impact all Seattle-area companies from aerospace to retail and has the potential to massively upend the financial industry.
That’s why the Washington Department of Commerce on Tuesday convened state business leaders to discuss the implications of blockchain technology for companies in the Puget Sound area and beyond.
“Nobody knew what the internet would lead to in the early ’90s,” Mark Mueller-Eberstein, a former Microsoft employee who advises businesses on technology trends, said. “Like the internet, it’s going to change everything.”
When it comes to the development of blockchain technology, Seattle is behind other top technology hubs including New York, Boston and San Francisco. But the Puget Sound region – which boasts leaders in the cloud, retail and mobile payments space, to name a few – should care. If it becomes ubiquitous, blockchain could change the way many industries have historically operated.
Blockchain stores data in the cloud through a vast network of computers. As a result, the system is decentralized, meaning no single entity – such as a bank – has control of transaction data. The technology removes the need for intermediaries to conduct transactions, which could broadly impact financial institutions.
Retailers, meanwhile, can use the technology to exchange data among members of a supply chain, and customers can verify the provenance of an item they buy, for example, to check whether the fair trade coffee they buy actually comes a coffee grower in a developing country who was paid a fair price. Health care providers can verify whether customers are eligible for insurance and use blockchain to expedite transactions.
It’s an online ledger anyone can use, which supporters say reduces fraud and increases speed and efficiency.
In the Puget Sound region, many companies are beginning to consider blockchain. Microsoft declared the technology as one of the “must win” workloads for Azure and has teamed up with big U.S. banks including J.P. Morgan, U.S. Bank and Wells Fargo. Amazon and Google, which has offices in Seattle and Kirkland, are researching the technology. Seattle-area law firms, including Perkins Coie, have special practices dedicated to blockchain and digital currency.
Source: Puget Sound Business Journal, Ashley Stewart
Photo: It’s a term that’s easy to overlook – or even make your eyes glaze over – but blockchain technology has big implications for Seattle-area companies from aerospace to retail and the potential to massively alter the financial industry.
Ashley Stewart covers technology and finance for the Puget Sound Business Journal.