Blockchain technology is poised to decentralize a lot of our daily operations. Many fintech, insurtech and banking  startups have already adopted this brand-new development environment. Yet it goes beyond financial technology services offering value to such spheres as IoT, transportation, healthcare, legal services etc.

Google search trends indicate that blockchain is at the peak of its popularity. Google searches for “blockchain” have gone up 1900% in the last three years.

Google search trends for blockchain

However, the latest fintech report by PwC has revealed that the players on the market still underestimate the possibilities of blockchain. While 56% acknowledge its importance, 57% say they are unlikely to respond to this trend. 83% of the surveyed are somewhat familiar with it, and very few consider themselves to be experts.

PwC blockchain technology

In this article, we’d like to shed some light on blockchain key concepts and its use cases in fintech. Since this technology has many applications is other industries, we also plan to explore them in our future posts. So let’s start with a brief explanation of how this technology works.

Blockchain technology explained

As defined by William Mougayar, blockchain is a distributed decentralized ledger that  transfers authority to a decentralized virtual network. It enables its “nodes” to continuously record transactions on a public “block” creating a unique “chain”: the blockchain. Each next block contains a “hash” of the previous code; therefore, cryptography (via hash codes) is used to secure the authentication of the transaction source and removes the need for a central intermediary.

“Smart contract” is another key blockchain concept. It’s a self-automated computer program that ensures the performance of the agreement. The terms of the smart contract are recorded in the code as a set of instructions. “Proof-of-work” – the authenticator of transactions – defines the right to participate in the blockchain system.

For engineers, it’s a unique development environment. The way you interact with this database is completely different from any other system. Thus it allows developers to create brand-new types of architectures. The proponents of blockchain even claim that technology-wise it’s going to be the next big thing after the invention of the Internet.

distributed ledger - blockchain

Source: On Distributed Communications Networks, Paul Baran, 1962

Benefits of blockchain

Every new block added to the blockchain contains “a hash” of the previous block. When the block is validated, the node updates its local copy of the database. Hence, you can’t take the block out of the chain without destroying the whole system. Such structure provides an indestructible digital record of actions. The elements protect each other ensuring an incredibly high level of security. This is apparently the greatest benefit of blockchain technology.

Other benefits include:

  • eliminating the need for a higher authority;
  • empowering the users;
  • reducing operation costs;
  • faster transactions;
  • unprecedented transparency.

Blockchain technology in fintech

Although blockchain is not limited to financial services, in this article we focus on fintech companies that use this technology in their businesses. So before going over specific use cases of this decentralized ledger, let’s establish the difference between the main 3 types of the blockchain.

Public, Private, and Consortium blockchains

Blockchain is primarily associated with money transactions and cryptocurrencies. Its most well-known implementations include a popular Bitcoin and the brand-new cryptocurrency ether. They are both Public Blockchains. Therefore, anyone in the world who takes part in the consensus process can accessed them. It’s worth mentioning that Venture capitalist (VC) investments in Bitcoin and blockchain industry went up from $230 mln in 2014 to $462 mln in 2015. So we can see that many businesses have high hopes for this technology.

Private blockchains are limited to one organization. Generally, you can use them for auditing, database management and enterprise content management. The examples of implementation include Eris and MultiChain platforms. They are much like traditional centralized systems with some degree of cryptographic auditability attached.

Consortium blockchain stands in between 2 aforementioned types as it can be controlled by a bigger number of institutions. In this case, the consensus process is controlled by a predefined set of nodes. The right to read the blockchain may be either public or restricted to the participants. R3 is an example of such a system.

Blockchain solutions

Cryptocurrencies occupy a lion’s share of the fintech market. Bitcoin was the first such blockchain-based currency to win the consumers’ trust. Thus it can be considered the first most successful use case of blockchain technology.

Many fintech startups have built their businesses around Bitcoin. For instance, BTCJam provides bitcoin-based peer-to-peer lending service. BitPay is a global bitcoin payment processor that allows merchants like Microsoft, NewEgg, and Warner Bros. Records to accept bitcoin payments from customers while pricing their products in their local currency. BitPagos uses bitcoin to enable credit for online payments in the emerging markets of Latin America where local currencies are subject to serious depreciation. There are also companies like Coinometrics that collect market data from Bitcoin exchanges to provide insight into the state of the Bitcoin economy. Coinbase and Kraken are some of the leading bitcoin exchanges.

However, blockchain solutions go far beyond bitcoin applications. In this article, we’ve gathered some interesting blockchain companies to watch. And we’ll start with Bitcoin’s largest competitor that introduced considerable technological advancements to the concept of a decentralized ledger.


Ethereum Project

Ethereum is apparently the most prominent blockchain-based project after Bitcoin. It was started in 2013 by Vitalik Buterin, a 19-year old cryptocurrency programmer. The launch of the platform took place in 2015. Ethereum is a public blockchain platform that works on smart contract functionality. Its decentralized virtual machine, the Ethereum Virtual Machine (EVM), can execute peer-to-peer contracts using ether cryptocurrency. It’s worth noting that V. Buterin was that first to see that the “distributed consensus” could go far beyond currency and the financial sphere. The creators of Ethereum realized that the technology is in itself a global computer that cannot be turned off because it doesn’t operate from a single localized server. Thus it can be employed in a variety of applications including projects related to finance, the IoT, electricity sourcing and pricing, sports betting etc.



Founded in 2014, Blockstream provides a range of software and hardware solutions to companies using blockchain-based networks. Blockstream Elements, the company’s core software platform, is a part of an open source project. Therefore, it provides plenty of resources and a mature protocol for blockchain developers.

The company also develops the sidechains technology which extends the capabilities of Bitcoin’s blockchain. Sidechains allow moving digital assets from one blockchain to another. Also, you can use the technology to link different markets together and provide liquidity through a shared protocol.



BlockCypher is an established blockchain services provider. It’s a cloud-optimized blockchain platform that powers crypto-currency applications. Blockcypher enables companies to build and secure blockchain applications with their web APIs and then run them on their infrastructure.

It provides a great environment for blockchain developers who don’t have to start building apps from scratch. The company provides engineers with plenty of resources and well-written documentation.



Chain is another company that develops and supports open-source blockchain protocol for financial applications. The company has established partnerships with such leading financial services firms as Nasdaq, Visa, Citi, Capital One and Fiserv. Chain’s products include Chain Open Standard – an open blockchain protocol, Chain Core – an enterprise-grade production node, and Chain Sandbox – prototyping and test environment that includes documentation and SDKs. Based in San Francisco, the company has managed to raise considerable funding from the leading venture capital firms.



Bloq delivers enterprise blockchain solutions. The company helps its clients build key layers of infrastructure for blockchain applications. Their solutions allow enterprise users to create, update and customize their own public, private, and permissioned blockchains. BloqEnterprise – the company’s flagship product is the enterprise-grade technology which serves as a blockchain operating system (BOS). It comprises several components:

  • BloqRouter is reportedly one of the fastest and most secure Bitcoin full nodes;
  • BloqDev is the blockchain development environment for JavaScript, Python and Java;
  • BloqThink is the support and professional services platform;
  • BloqView is the dashboard for data analytics;
  • BlockSLA is the enterprise level support system.



Lisk is a public blockchain platform that aims to be the first successful modular cryptocurrency. Similarly to Blockstream, the company is developing the idea of sidechains. This technology solves the issue of scalability as every blockchain app works on its own sidechain, separately from the main blockchain.

Engineers can build Lisk blockchain apps from scratch in pure Javascript on Lisk APIs. In addition, every app runs in its own sidechain secured by a group of nodes elected by the app’s owner. The platform also provides detailed documentation for those willing to learn how to code blockchain apps.



Wirex is a personal banking solution that combines the benefits of blockchain technology with users’ everyday finances. It provides bankless financial services bridging the gap between traditional money and cryptocurrencies. The company offers 3 main services: a mobile app, instant remittance service and 2-way bitcoin debit cards. Wirex app offers users a mobile platform to perform 24/7 financial transactions. Plastic or virtual Wirex cards enable on-demand conversion between bitcoin and such traditional currencies as USD, GBP, EUR. Instant remittance service ensures secure money transfers without cross-border fees.

To conclude, modern consumers want to have maximum control over their finances. They demand fast and transparent financial services. Meeting this need has become the primary goal of any fintech company. Only a few years ago a distributed system that is controlled by its users, cannot be mismanaged, doesn’t charge any fees, and is not limited by any government seemed like a dream. Today it’s possible thanks to blockchain technology. More and more businesses take advantage of this tech to deliver seamless financial services to their customers. Like other software development providers, we see ample opportunities in the blockchain. Our engineers that work on fintech projects were the first to adopt this technology. Yet we are sure it will go beyond financial applications and will spread over other industries. So we’ll definitely explore more use cases of blockchain in our next articles.

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