Blockchain co-inventor Stuart Haber believes that regulators, the general public, and anyone else interested in a bank’s records should have access to some information about banks. In an interview with ETBFSI at the Singapore Fintech Festival, he advises that they should be certain that they are actually looking at the relevant information, where blockchain can help. In the course of his 30-year career, Haber has worked for both large, well-established firms like Hewlett Packard Enterprise, HP Labs, and Bellcore as well as startups like InterTrust and Surety, which he founded with his co-inventor, Scott Stornetta, and which in 1995 deployed the first commercial blockchain in the world.
What is the process for beginning work on the blockchain?
Stuart: Alright. I set an ambitious goal to protect the world with Stornetta. I had already been working at Bellcore for a few years in 1989 when he first arrived and announced, “I’ve got this big problem. How can the accuracy of records be guaranteed? The world did not appear as it does today in 1989. Many people didn’t even know what an email address was when I started in 1987, but it was obvious that all world records were moving online because digital files are so simple to alter. Concerning the human record, we were concerned. Because of this, it took some time for the solution to become widely used, but there is a good reason for this. It works, and we had the good fortune to arrive early enough to inquire as to how to proceed and develop a design.
Which application of blockchain in the banking and finance industry would be most beneficial?
the records technology. Transparency is also the most important factor. There is a lot of information kept in banks that shouldn’t be made public. However, there is likely some information that should be made available to regulators, the general public, and anyone else reviewing a bank’s records. For instance, they ought to be able to confirm that they are viewing the genuine article.
Blockchain is currently being used primarily and aggressively for cryptocurrencies. Did you design it specifically for cryptography, or did you believe it would be a research project for the entire financial and banking industry?
We built it with the ability to handle records of all different kinds in mind. To provide what we refer to as Digital Time-stamping Services and Digital Integrity of Record Services, we spun out a company called Surety. We considered numerous applications. Our goals were fairly modest, but the company persuaded a significant institution to adopt our concepts. They also use the programme. Making everything work in unison with what they’re already doing.
One of the CTOs claimed that given the hype surrounding blockchain, it is a technology used by the military. Can you take us back 30 years and tell us what you thought about blockchain and the need to write this code at that time?
Some cryptographic tools, though not yet widely used, are completely standard in the cryptography community and can solve issues, but doing so necessitates having faith in the key entity acting as a registrar of records. Even though that solution worked, we didn’t find it satisfactory because it relied on a single institution or entity, which means there is a single point of failure. We therefore wanted to create a solution that did not require a single centralised entity, but we were having a lot of difficulty doing so. Given that I have a background in mathematics, I told Scott that perhaps we cannot solve the problem, but eventually we came up with a solution that worked. In reality, several different approaches were successful, one of which was the blockchain data structure itself. The other approach involved selecting parties at random to validate information, and it is now applied in many blockchain systems.
How do you see the use of blockchain evolving after 30 years?
Such a meaning or value permeates everything. People have heard about it because so much money was made, just walk down the street. Although businesses and institutions do not yet completely rely on it everywhere, I believe it will soon.
Blockchain was viewed differently by central banks because it was employed in the cryptocurrency industry for illicit purposes. Do you believe a wonderful ecosystem is being abused?
No, it hasn’t been used improperly; every tool has both good and bad uses. For instance, because we both speak English, we can communicate with each other and create good or bad plans. In a similar manner, blockchain is just another tool that can be used for good or bad.
Do you anticipate that regulators or central banks will view blockchain favourably in the future?
Yes, it can definitely be used to enable system transparency and assurance.
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