Nicolas Roth (pictured), Head of Alternative Assets at Reyl & Cie has written a report on Blockchain entitled: ‘Blockchain in financial services, hype or revolution?’.
Roth explains that Blockchain technology is currently mainly associated with Bitcoin, however he believes the real revolution will come from the use of blockchain in financial services.
Roth writes: “Blockchain has the potential to dramatically reduce the time of a typical time financial transaction by removing bottle necks of communication with various entities such as banks, brokers and clearing houses. Contrary to any system using an intermediary, each participant in blockchain has access to the database and its history with no party or person controlling the data. Each transaction takes place between the users without the need for third-party intervention.”
However, Roth believes that Bitcoin has a number of limitations due to its architecture which has left the doors open to competition from alternative technologies being developed, such as Ethereum.
Roth writes that while Bitcoin can only be bought or sold, alternative technology like Ethereum can produce smart contracts which makes it a multi-state service. Roth believes that the integration of blockchain technology into banks and other financial institutions will likely bring a wave of efficiency and reduce cost bases. He says that banks should be bold and embrace blockchain technology in order to transform their processes.
