A British Google engineer, whose speech recognition software is used in more than a billion Android smartphones, has launched a company that uses blockchain technology to build a better operating system for banks.
Paul Taylor from Cambridge University started working on the system, called Vault OS, two years ago. His blockchain technology has already won the hearts of bankers, which is odd because few people thought they had any. The reason it is so good is that it has the potential to shake up how markets operate. The technology, which shares ideas with the digital currency bitcoin, creates a shared database in which participants can trace every transaction ever made.
The ledger is tamper-proof and transparent, meaning that transactions can be processed without the need for third-party verification.
Taylor’s idea is that the banks are using software which was written in the 80s and 90s, and they just are not ready for the security-conscious internet app age. But blockchain provides a very secure way of storing transactions. It means that there is no need for in-house data centers because everything is on the cloud.
He said that high-street banks were spending around $1.3 billion a year on computer technology, much of which he said was being used for propping up the current “legacy” systems rather than on any innovative technology.
Blockchain could be five to 10 years away from widespread adoption. It street cred was damaged by its association with bitcoin, but it is working with ten banks and a trial of the new system will start in August.