Blockchain and how it is changing the way we do business

Monzo Chat
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Hi there, I am interested in speaking to people working for Mondo familiar with this space or keen to explore ways to develop and utilize it in the business…

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Are you not familiar with the technology?

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You need to ask yourself why millions of pounds are being invested in his space and why BofE are investing money and resources, also why the former UBS CIO set up a tech hub. UBS is a bank btw - this technology will revolutionise banking, the world of finance and other industries…

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I’ve asked myself but don’t have the answer. Could you enlighten me please?

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Using blockchain for things such as bitcoin is fine, because there is no central authority then with the distributed ledger you know the information is verifiable doesn’t matter where it comes from. This is ideal as since there is no central authority its hard to verify if a transaction is legit.

Using blockchain for things such as a banking system is somewhat flawed. A bank is the central authority, it knows a lot about you and can verify a lot of information it’s given. Theres little pros to changing this - especially privacy.

Saying that … I do have other thoughts. I could understand though using blockchain for international payments - since some of these countries don’t understand how ledgers work - this would be a much neater system to keep track of the worlds money and to help with fraud! (and where the Rothschild are …)

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One example, a bank can share that ledger with other banks or third parties for validation - we have done some work on this. Even if it’s for internal use only - there are many reasons to run one.

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Digital Asset Holdings in the US are adopting the technology to look at transaction settlement using the distributed ledger…this is a real focus now.

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Is the theory there that everyone can be on the same page much quicker because it’s not being bounced around multiple ledgers?

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It’s all about encrypted STP mechanisms, enhancing efficiency by making compliance more robust and reducing settlement timeframes. Using distributed ledger technology. With respect, the gentleman broader is not thinking beyond traditional banking.

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Why would a bank want to share its ledger of its customers financial data with another bank, this can cause rivalries - anyways back to the point.

The banks ledger should always be 100% correct and so why would they need to share it with another bank to verify its own ledger is correct. I would be more worried if they needed to verify against another bank. The bank knows how much is income and expenditure and so can balance the books - there should be little in way of external influences here.

There are defiantly arguments to blockchain, but for customer transactions and general financial data I would say its totally unneeded and more of a hassle. For international payments I could understand it.

For transactions between banks I am still on the fence - does bank X want everyone to know they send millions offshore every week? Probably not.

Have you heard of internal blockchains at HSBC? Maybe you have, they’ve existed for a while but are totally private to themselves only, so they’ve totally missed the point in blockchain.

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Gentleman broader? You’ve lost me again.

As @JoshuaT says, why would a bank share a ledger of their customer’s spending? I could see a private blockchain that all banks submit data to and verify but only accessible by Bank of England/Financial Authorities being of use but would that really be a blockchain as we know it?

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There are several points I’d like to make about how the Blockchain CAN facilitate traditional banking and how this might be applicable to Monzo.

  1. MasterCard have released their own blockchain, and since Monzo uses MasterCard as their issuer, it seems fitting that they “might” find beneficial applications of the blockchain.

  2. The banks “single ledger” essentially creates a single point of failure. Sure, banks will have very secure backups of this information, but this isn’t as foolproof as the blockchain. A distributed ledger on the other hand provides backups by design, over a consensus driven architecture.

  3. Fraud prevention; the classic example is that the blochchain solves a very old banking problem - double spending.

  4. Bank account details, purchase history and balance can be stored on the Blockchain as an immutable record. Whilst the information is public, it can also be anonymised.

  5. Monzo could in fact adopt several Blockchain technologies (Bitcoin, Ethereum, etc) and become a truly multi-currency bank, building a transparent layer between traditional currency and crypto-currency.

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At citychain17 discussing how blockchain will change the face of legacy banking.

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On this, now having geeked out on blockchain / distributed ledgers all the different coins/token/implementations of blockchain like ripple, it’s definitely an interesting space to be keeping an eye on. @tom advised at the first current account event, in answer to my question on whether :monzo: would use blockchain, that there are no current plans for the business to use blockchain however it’s an interesting technology and he’s keeping his eye on it… happy to be corrected it was a few weeks ago