Safer with blockchain: Credits selected as official UK DLT provider

By Madhvi Mavadiya | 2 August 2016

After advocating blockchain technology at the start of this year, the UK government has chosen Level39 member Credits to act as the official supplier of distributed ledger technology (DLT) to public sector organisations. The blockchain tech company was awarded a place on the G-Cloud 8 framework agreement and will now provide its Platform-as-a-Service through the Government Digital Services’ Digital Marketplace.

The Digital Marketplace would be used by UK public sector organisations that are interested in obtaining cloud and digital specialist services. The service that Credits provides will benefit organisations such as the National Health Service, HM Passport Office and the Department for Work and Pensions by strengthening identity management, retaining data security and of course, minimising the risk of fraud.

The security of blockchain has been always been a controversial issue, but in January of this year, a UK government report advised that blockchain should be used to run public services because it is a more secure way of managing data. As records will be kept on a digital ledger, private blockchains will only permit specific users and in turn, will be highly resistant to malicious tampering, according to the BBC.

Matthew Hancock MP, Minister for the Cabinet Office and Paymaster General and Ed Vaizey MP, Minister of the State for Culture and The Digital Economy, authors of the “Distributed Ledger Technology: beyond blockchain” report, said that blockchain is the most exceptional form of innovation at the moment. “As we have seen open data revolutionise the citizen’s relationship with the state, so may the visibility in these technologies reform our financial markets, supply chains, consumer and business-to-business services, and publicly-held registers.”

Last year, former Prime Minister David Cameron announced that this country was the best place to “unlock the full potential of this technology”, according to the report and the Chief Scientific Adviser to the UK Government, Sir Mark Walport, explained how the data management systems that are currently used are large centralised systems with “a high cost single point of failure”.

In the report, Walport mentioned how DLT could help with governance in four different ways: traceability in aid spending, protecting critical infrastructure, registering assets such as intellectual property, wills, NHS health data and pensions and reducing benefit fraud.

 “We are excited by the huge potential of Distributed Ledger Technology for many different government and public sector applications, and are looking forward to working with UK public sector organisations to improve the efficiency and effectiveness of their services for UK taxpayers", Nick Williamson, CEO & Founder of Credits said.

Alex Wolff, head of product strategy at Misys, explained how while investment in bitcoin has decreased, blockchain investment has increased. “It is an area that is set to transform the market and deliver significant benefits, including the ability to disintermediate central parties, eliminate reconciliation processes and reduce cost and lead time. However, there are formidable questions yet to be answered before blockchain will be able to take hold.”

In other news, despite being known as the world’s most volatile currency, bitcoin is now more stable than the British pound following the results of the EU referendum last month. Interest in bitcoin has grown and many are looking to trade the digital currency because it’s a safer bet in comparison to sterling.

According to The Independent, bitcoin is the most unstable thing in the financial markets and volatility is expected due to the controversies the currency has been involved with. However, with the cryptocurrency being a safer bet at the moment, Raja Raman, director of technology at Sapient Global Markets, explored how investors are attracted to the safest assets in times of crisis.

In troubled times, most investors rush towards safe assets. Brexit has been one such recent event that brings back memories of the Lehman crisis. The most obvious solution is gold. Over the past few years, bitcoin has emerged as the most commonly used crypto-currency. By far, it has the largest market capitalisation among all such currencies,” Raman was quoted in Business Standard.

In conversation with bobsguide, Angus Champion de Crespigny, leader of blockchain strategy for Americas Financial Services at Ernst and Young, explored this view. “There has always been a lot of excitement around cryptocurrency. Now, the phrase “I like blockchain technology but not bitcoin” has been common within the financial services industry of late.

“However, I think it’s too early to rule out bitcoin, as the technology provides a global, secure environment with embedded trust and that is very powerful. Rather than necessarily as a currency alternative, bitcoin should be seen as the fuel that is used to run the network where data can be exchanged.