In recent years there has been a clear trend towards investment in Fintechs companies, where many of them make use blockchain technology, proposing new business models that were previously unimaginable. This article will explain what this technology is and what benefits it will bring in the future.
The Internet of value
For several years, many companies have used the Internet to use information as a business model. These companies have relied on traditional protocols to share information with the rest of the world.
From large companies such as Google, Facebook or Twitter, to a local newspaper, they make use of the information to obtain clients by supporting their business model. This is known as the “Internet of information.”
The Internet of value states that, just as information can be moved, value (tokens) can be moved. For this, in recent years new protocols have emerged that allow the exchange of these tokens or digital assets in a secure and decentralized manner.
Both approaches have been created with different protocols and standards but in both cases open. This has enabled the easy appearance of applications. In the Internet of information, protocols are a small part and not as important as applications. In the Internet of value, protocols are those that guarantee operations with digital assets and their security and it is the applications that use them, taking the first ones a greater relevance.
Blockchain is a protocol formed by a set of technologies based on P2P, public key cryptography and time stamping.
Blockchain can be understood as a distributed database where all the information is distributed among its nodes. Under this set of connected nodes transfer operations of assets or digital goods can be carried out.
When a new node joins the network, all operations performed on digital goods are downloaded to it. The distribution of information over the network is achieved using P2P technology.
The word blockchain refers to the way in which this technology stores information. Blockchain generates different blocks and links them forming an immutable chain whose connection logic depends on the content of the blocks themselves, thus achieving a system in which the modification of one of them is impossible without affecting the following.
All the confirmation of the work is produced by the consensus of all the nodes, the certifying entities disappear. In blockchain that central figure does not exist, but it is the nodes themselves that carry out the operations which in turn confirm them.
One of the main features of blockchain is that all operations are signed with the user’s private key. This system allows any operation can be verified by any node in the network. When the user’s public key is known, it is possible to know if the message has been encrypted by his private key, but the information cannot be modified and signed by another user when he does not have his password.
Applications and new businesses
The possibility that blockchain provides to move assets without the need for intermediaries, makes new business models appear in sectors such as financial. That is why this sector is being the most affected by the irruption of this technology and is one of the sectors that are investing most in it.
By not needing intermediaries for the certification of operations, clearing and liquidity chambers, financial courier companies … they are seeing how a new technological model can affect their current model, which is causing them to invest in these technologies to reinvent themselves.
This decentralization can not only affect financial companies. In recent years, new companies have emerged that make use of these technologies and are unmarked from the financial sector:
- Diamond registration in Everledger: The guarantee of membership of these goods is usually on paper which makes it easily falsifiable. The British company together with the insurance manager Allianz have used blockchain technology to register these goods and guarantee their belongings and movements in the market.
- Storage system: Storj is a distributed storage system that allows storage rental. It also allows the rental of hard disk to accommodate information from other users.
- Property registration: Great steps are being taken to implement a system that stores the buying and selling of properties and property titles. In Sweden some projects are already being done trying to carry it out.
- Registration of births, deaths, marriages, divorces …
- Notary services: Blockverify and Stampery offer notary services that make use of blockchain technology to verify all types of information. Through these services you can “attest” to the creation, modification, change of ownership, etc. of a digital asset.
This technology is revolutionizing several sectors that were consolidated in the market. It is also favoring the emergence of new companies and new business models consolidating itself as one of the technologies that have come to change the world.