Mobile and Emerging Technologies

Changes in digital payment technology

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data_lock_shutterstock_wordpressI’ve been noticing more interest in blockchain technology this year, from Bitcoin sessions at the Internet Retailing Conference and Exposition (IRCE), to active conversations at OSCON. In some circles cryptocurrency such as bitcoin, are linked to issues of government surveillance, libertarian ideals and personal freedom. While those topics can generate a lot of discussion, I am more interested in the technology that underpins bitcoin and others, which is blockchain.
While online payment systems have made tremendous strides and enabled commerce, they remain centralized. Whether it is PayPal, Chase, Citibank, etc. there is a central authority that is a gatekeeper of the transaction. That architecture comes at a high cost and presents a very appealing target for hackers. Blockchain, which is not controversial unlike the digital currencies that use it, replaces a centralized authority with distributed, independent nodes. Blockchain requires a majority of notes, which are separated and non-connected, to be in agreement about a transaction and once written, that transaction is known to all nodes. No covering one’s digital footprints or hiding evidence of a hack. In the bitcoin model, the nodes are anonymous and the transactions can range from mundane to unethical to extremely illegal. That is the system bitcoin built upon blockchain. I think in many people’s minds the two are linked and it is time to divorced those concepts.
When the Financial Times reports on blockchain, as they have here, the technology has moved beyond its roots with bitcoin. Due to copyright restrictions, I cannot quote from the article but I strongly encourage you to read it. It describes a broad consortium of banks that are actively determining how to incorporate blockchain into their payment systems.
I expect the adoption of blockchain technology to enable transactions that today are not economical while reducing risk, something that should benefit us as consumers and retailers.

About the Author

For over 20 years Mr. Price has led teams doing needs analysis, design, development, implementations and presales in the IBM Collaboration space. Prior to consulting Mr. Price spent 12 years at an international bank deploying IBM messaging and collaboration solutions. As a customer Mr. Price led project teams of international resources for design and implementation projects. Mr. Price is an three time IBM Champion.

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