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How Has Blockchain Evolved in the Past Year and What Does the Future Hold?

In recent years, digital currencies have been all the rave. However, the idea that digital assets are exclusively some form of currency is slowly falling by the wayside as different use cases are emerging and being rapidly adopted. This May, The Fintech Times is looking to showcase some of these new methods and explore how the digital asset ecosystem is evolving.

We round out our digital assets month looking back at the tech facilitating it all: blockchain. In 1991, the first paper on the use of cryptographically secure blocks on a chain was published, and just under two decades later, the idea was tested and Bitcoin was born.

The technology has come a long way since then, with countless companies creating their own blockchains, to facilitate payments, keep track of ownership and more. We set out to review the latest blockchain innovations, understand how the tech is being used now outside of crypto, and what the future holds.

Reducing risk
Yuval Rooz, co-founder and CEO of Digital Asset
Yuval Rooz, co-founder and CEO of Digital Asset

Yuval Rooz, co-founder and CEO of Digital Asset, the blockchain and tokenisation software and services provider looks at how capital markets are beginning to take note of blockchain’s impact.

“Blockchain technology is transforming how our global financial system operates. 

“We’ve seen industry-leading firms such as Goldman Sachs DAP, Onyx by JP Morgan, Broadridge’s DLR, and HSBC Orion take their programs from PoC into production, and the momentum continues to increase. The scale of this change is complex, and the next challenge that institutions are grappling with is how to maximise the interoperability benefits across the broader market. 

“Significant advancements on this front have been made in the last year, and the creation of the Canton Network is a prime example. The industry’s understanding of how atomic settlement can be achieved within current regulatory constructs continues to expand, and the evidence of its potential to reduce settlement and counterparty risks will continue to foster new use cases and business models.

“Capital markets participants worldwide—including central banks—are taking notice. The growing list of pilots and projects in production indicates how transformative financial institutions believe blockchain technology will be for our global financial system.”

Increasing security and scalability
Bryan Daugherty, global public policy director at BSV Association
Bryan Daugherty, global public policy director at BSV Association

A similar sentiment was shared by Bryan Daugherty, global public policy director at the BSV Association (BSVA), the firm advancing businesses on the BSV blockchain. He expressed: “The past year has witnessed a substantial evolution in blockchain technology, going beyond its initial financial applications to more complex systems impacting various sectors.

“Notably, the development of Teranode, a commercial-grade node software, represents a significant step forward. It dramatically increases the capacity for transaction processing, pushing the boundaries of blockchain scalability and enabling it to have a broader socio-economic impact globally.

“Innovations in decentralised identity and information security are also at the forefront. These advancements aim to transform traditional systems by enhancing user autonomy over personal data and increasing the security measures necessary in an increasingly digital world. Such innovations are crucial as they not only provide more robust security frameworks but also ensure greater user privacy and trust in digital interactions.

Outside of the traditional financial sphere

Daugherty then turned his attention to how blockchain is being used outside of crypto. “Blockchain technology is progressively being adopted to address challenges that have been poorly met by traditional systems. This includes diminishing dependence on trusted third parties and creating more efficient methods to manage and monetise data.

“For instance, CERTIHASH Sentinel Node, developed in collaboration with IBM, revolutionises how enterprises manage cybersecurity. By significantly reducing threat detection times from an average of 204 days to nearly instant, this application addresses the urgent need for rapid responses in the wake of increasing cyber threats. This capability is particularly valuable given that breaches extending beyond 30 days can cost companies upwards of $9million.

“In agriculture, companies like Smart Grow Agritech LLC are harnessing blockchain to empower farmers by providing more precise production tracking and data management. This integration not only boosts agricultural productivity but also supports sustainable practices by optimising resource use and ensuring compliance with evolving agricultural regulations.

“Additionally, nChain‘s digital signature application, ‘nSign’, is transforming document management across industries by enhancing the security and transparency of document signing processes. This application ensures that documents are tamper-proof and simplifies the verification process, thus fostering trust and streamlining workflows in sectors where document integrity is paramount.”

Curbing the rise in APP fraud
Andrew Carrier, member of the executive committee at Quant
Andrew Carrier, member of the executive committee at Quant

Andrew Carrier, member of the executive committee at blockchain finance firm Quant analysed how blockchain tech can be used to combat one of the biggest threats facing the public. “While the unregulated crypto experiment has clearly failed, there are many ‘boring’ use-cases of blockchain – those that prioritise security, regulation and efficiency – that are making a real difference in improving everyday applications.

“Take the epidemic of APP fraud, which cost victims a staggering £2.3billion in 2023. This problem is extremely hard for banks to prevent, given the extent to which fraudsters go to manipulate their victims.

“By setting up specific transaction conditions and ensuring fund release only upon meeting predefined criteria, blockchain’s smart lock system could substantially mitigate the risk of fraudulent activities, curbing unauthorised transactions, reducing reimbursement overheads for banks – and saving the victims the shame and stress that often goes with being scammed.

“These locks facilitate the involvement of various parties, meaning users determine when funds are unlocked for specified recipients. For instance, all parties agree to transaction terms during checkout; funds are then locked in the customer’s account, awaiting confirmation of goods delivery; upon verification, the funds are instantly transferred to the seller.”

“This is just one example of how blockchain is now poised to change industries through pragmatic, everyday applications.”

What’s next?
Angus Fletcher, CEO of Fnality
Angus Fletcher, CEO of Fnality

Angus Fletcher, CEO of Fnality, the paytech looked to the future at the role blockchain can play in bridging the old financial world with the new.

“Blockchain has the potential to bridge the gap between defi and tradfi, and there are many innovations and applications that are being explored. When using blockchain for wholesale payments the Fnality vision is an interconnected network of digital payment systems that can manage liquidity across different currencies.

“Fnality has already launched in the UK, and the plan is to expand into the US, Europe, and ultimately Asia, which will make it possible to transact and settle across different venues instantaneously and around the clock. This is a significant step toward removing settlement risk, time zone barriers, and significant costs from intermediaries. This will provide core payment facilitation in new tokenised markets by enabling near instant settlement.

“At the same time as we see traditional markets moving ever closer to T+0 with the US moving to T+1 this year and the UK and EU likely following suit within the next two years, the likes of Fnality will be able to provide the necessary infrastructure to allow the continued reduction in settlement times and risk across geographies.”

Author

  • Francis is a journalist and our lead LatAm correspondent, with a BA in Classical Civilization, he has a specialist interest in North and South America.

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