City Dynamics caught up with Microsoft’s Robert Pope to ask him about Blockchain – what are the implications for Microsoft Dynamics and for accountants?
There’s been a lot in the press about Blockchain. Can you explain it in a nutshell?
It’s an online system for distributing ledgers. It stores the same transaction in multiple locations, significantly increasing security and privacy. At the moment, it’s mainly used to store financial transactions, and major financial institutions are some of the earliest mainstream adopters of the technology. But despite the current FS focus, the wider implications for Blockchain are enormous (from applications for security and tracking to medical records). It’s come a long way from being seen primarily (thanks to Silk Road’s bitcoin deals) as an under the counter ‘cash in hand’ platform.
Why is it such a big deal for the financial sector?
The answer is twofold: partly, it raises huge questions about taxation and visibility. This new technology presents an enormous challenge to government in terms of visibility. It is hard to envisage a simple solution to this. The second reason it’s an enormous deal for FS is that Blockchain offers a framework upon which enterprising businesses can build a host of disruptive new applications that will revolutionize the way all kinds of transactions operate. Bitcoin is the first major example, and its power as a currency that is more flexible and fluid than any government-issue currency. It’ll be fascinating to watch the innovations that come next. From a Microsoft point of view, we’re excited about our partners developing a range of new disruptive applications based on the Blockchain service we provide on our Azure platform.
What are the biggest misconceptions about Blockchain?
The press around the nefarious colonization of Blockchain (by drug cartels and terrorists), has distracted the public from its huge positive potential for legitimate business activity. This perception is outdated, but it still lingers.
How is Microsoft using Blockchain?
Microsoft has started to deliver Blockchain services using our Azure platform. We provide the service, and support our partners to configure it in the way that best suits their business or clients. Currently, Microsoft is collaborating with Bank of America Merrill Lynch to build a prototype Blockchain platform using Azure to speed up transactions and reduce risk.
What are the implications for SMBs?
Ultimately, Blockchain will be adopted by businesses of all sizes and types, superseding traditional payment methods and other types of administering transactions of all types across the board. Blockchain provides a range of opportunities for business leaders to evolve their services, optimizing their operational processes. It will also reduce fraud and reduce delays. Its abilty to update mutually important data in real time has a whole host of potential benefits that the world’s leading developers are working on now. It’ll be fascinating to see what they come up with.
Want to keep up to date with Rob? Follow him on Twitter at @roberpopew