The Financial Services Roundtable held an event on Tuesday to discuss the potential for blockchain in financial services.
Blockchain can be based on a distributed ledger or it can be ledgerless, Toufi Saliba, CEO of PrivacyShell.com, said. Saliba is co-author of a ledgerless blockchain called the TODA protocol, which “benefits from distributed computing.”
He said people confuse distributed systems with those that are decentralized. The difference is security. “If you don’t have a decentralized system, the way to attack is just to attack that centralized point. A decentralized system makes it much harder to attack,” he said.
A distributed system goes a step further because no single point in the system has total control.
Saliba sees “phenomenal opportunity” in blockchain because 2.5 billion people globally have smartphones but don’t have access to banking services, a number that is expected to double in the next five years. “Imagine 5 billion people with no access to banking,” he said. “What kind of business could you be running in five years if you had access to five billion people?”
Arijit Das, senior vice president and division manager at Northern Trust, noted that “many people are trying to pursue the holy grail of the super smart contract” with blockchain, but he said the technology isn’t there. “If you try to build something like that, it doesn’t work very well.”