the RIVER – THE bitcoin was born as a virtual currency libertarian, with the promise to subvert the global financial system. Seven years later, the invention continues to be a curiosity obscure, while financial institutions, payment companies and central banks — that is, the "enemies" of the original bitcoin — have a race to capture the technology behind the criptomoeda. They are keeping an eye on the blockchain, a model of virtual network that allows financial transactions to occur without the need for intermediaries to validate them.
The banks see in technology an opportunity to reduce cost, cut out the middleman and offer new services. For central banks such as britain and China, technology is an important mechanism for the reduction of fraud and the tracing of transactions.
The bitcoin is very different from the default of the banks. When a person transfers money to another today, are the banks that approve the transaction, checking if the sender has that amount and if the recipient has an account to receive it. In the case of bitcoin, there is no bank that approves the transaction, but the "accountholders". Because it is a virtual currency, users are connected by means of computers.
When someone sends bitcoins to another user, a digital code is generated. At this time, the computers of all users of bitcoin in the world will begin a race to crack that code and say if it is valid. After that, the code is appended to a file with the record of all transactions ever made in bitcoin. The computers of all users have a copy of this file, and it is used as a reference to validate future transactions.
80% OF the BANKS are to START PROJECTS IN 2017
behind all this engineering is the blockchain, and it is thanks to him that the bitcoin can facilitate reliable transactions, without the need for institutions in charge of verifying, even when you are out of the reach of regulators. By eliminating the middleman, it enables the cost-cutting; for the use of the entire network to confirm transactions and a file with the record of all of them, it makes it more difficult cheats.
Paschoal Baptista, a partner at DeLoitte, summarizes in four points the interest of the financial system in the blockchain: reduce cost, decrease operations, offer new services and improve the capacity of current services. In the case of central banks, he states that the main goal is to facilitate the audit process.
— In the blockchain, not if you can mess around in the registry of the transactions. This allows for an audit much faster and more complete. Soon, he is less susceptible to fraud and errors, ‘ he said. — Up to a process such as the assessment of Income Tax by the Revenue would be much more simple, for example.
The World Economic Forum is convinced that it will be a key part of the global financial system. According to the forum, more than$ 1.4 billion has already been invested in technology in the last three years, and 80% of the banks on the planet should start projects with it in 2017. Are already more than 90 central banks discussing the technology.
The consulting firm McKinsey, for its part, calculates that the investment of venture capital in blockchain was US$ 600 million between the end of 2014 and the third quarter of 2015. Only banks need to invest$ 400 million in the year 2019, from US$ 39 million in 2014. The ceos expect a significant impact within five years. In segments of payments and capital markets, the expected impact is up to$ 85 billion.
BRADESCO, ITAÚ AND BM&F BOVESPA
Three brazilian institutions entered this year for the R3, a private consortium with more than 45 financial institutions (including giants such as JPMorgan Chase, Barclays, and Wells Fargo) that works on the development of practical applications of the blockchain. The brazilian Bradesco, Itaú Unibanco, and the BM&FBovespa. In February, the group was reported to have achieved success in a test of trading of digital assets in a private network that spent over four continents.
BM&FBovespa has created a group with 16 professionals from various boards to understand the various patterns of the blockchain that are emerging. One of them is the Etherium, which has a virtual currency to the public that presents itself as an alternative to the blockchain. Behind it is the firm’s venture capital DAO, and the system ended up being shaken after the recent hacker attack. Another emerging model is the Rope, developed by R3.
— On the model of the bitcoin, all members of the network have a copy of the complete record, although all of them are encrypted and do not give to know the identity behind the transaction. In the capital market, however, there has been a resistance to the possibility that all participants have a complete copy of this file, ” explained Jochen Mielke de Lima, director of trading Systems of BM&FBovespa.
This is the big question about the use of the blockchain in the financial system. In Wall Street, protect information of the competition is the secret of the business. So, what financial institutions seek is a system in which only the data being strictly necessary to be shared. As defined by Lima, a blockchain in that the records only contain the public information of each transaction (such as a cryptographic signature that guarantee), but without details such as who paid what to whom.
LOWER SHARE DATA
This is one of the objectives of the Rope. Your website brags about the fact the technology "does not have the unnecessary data sharing", stating that only the interested parties will have access to the information. In it, the validation of the transactions is also made by a restricted number of participants — that is, the system of consensus is different from that of bitcoin.
in Addition to using different models of bitcoin, the blockchain of the banks should also unfold in multiple networks, each dedicated to a type of service, according to Rony Sakuragui, manager of Research and Innovation from Bradesco. As the rules of each service are very different, there may be a blockchain address only international shipments, the other for the system of payments, and so on.
The Bradesco has been researching the use of the blockchain to prevent fraud. Second Sakuragui, the technology allows for a sharing of more efficient information about irregularities among the banks. The transfer of international resources is another point of interest.
— By means of the Swift system (Society for Worldwide Interbank Financial Telecommunication, its acronym in English) that he uses today, for you to make an international shipment to a country in Asia that does not have relationship with this bank, the system uses banks as intermediaries to reach him. But you pay a toll, and it may be that the transaction does not complete because the recipient is, for example, in a black list. With the blockchain, you can go directly to that bank and have confidence that the transaction will end — said Sakuragui. — The accounts are not closed. Does not to respond if it even comes out cheaper. But there is the expectation that yes.
The Santander launched in the first half of last year in the United Kingdom an application, in partnership with the fintech Ripple to make international remittances through blockchain. The users are employees of the bank may make remittances of euro to dollar or pound to the euro by the middle of the cell, using the platforms of the Ripple, Apple Pay and Elavon.
— Here in Brazil, we have some of the work of riding and we will promote a hackathon (programming marathon) whose theme will be the payment and criptomoedas, in São Paulo, ” said Richard Flávio da Silva, executive superintendent of the Technology of the Santander Brasil.
The brazilian Central Bank was formed in June a working group to discuss the technology.
— what we see is a technology that can represent the simplification of processes, reduction of cost and the "disintermediation". But, in concrete terms, yet not move very much. The technology area of the BC has done are some work to understand the technology, as a proof-of-concept tested in a controlled environment, ” said Paula Esther Leitão, deputy head of Department of Regulation of the Financial System in BC. — Is still incipient, but there is a lot of expectation that this is a technology with great potential.
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