Bitcoin technology, also known as the blockchain, is of great interest to a lot of people. Financial institutions all over the world are experimenting with the concept, albeit in a private and permissioned version. The primary selling point of open blockchain standards is how an immutable ledger of records is created. But some people see this as a problem as well. Immutability Is Never A Bad Thing On paper, the prospect of having an immutable record should be appealing to any financial institution. There is nothing to hide, and no corruption or fraud to be worried about. In fact, this concept translates beyond the financial sector, as any business or project could benefit from having indisputable records of authenticity. Unfortunately, not everyone sees it that way, for some unknown reason. An immutable record builds trust, something that is tough to come by in our society today. At the same time, this immutability may limit some of the possibilities for blockchain technology in the financial services sector. Privacy laws, for instance, could prove to be a thorn in the side of blockchain technology. New legislation in various countries seems to favor the idea of “ the right to be forgotten” in the financial sector. However, if there is a permanent record of transactions – possibly including human error – not being able to rectify it becomes a problem. To put this into perspective, financial service providers will need to improve upon its lack of pristine accounting skills. Human error is far too common these days in the financial sector, and the blockchain will not be able to solve that problem. In the real world, some records need to be erased or changed, which creates a lot of confusion and obfuscation. But that is not the only problem, as the blockchain […]
