Fintech vs. Blockchain


Fintech vs Blockchain

With the constant barrage of news concerning Bitcoin, cryptocurrencies and Blockchain, it’s important to highlight the differences and complementarities between these 3 emerging notions. Fintech, on the other hand, has been with us for almost as long as financial services themselves but we need to establish distinctions and overlaps between Fintech and Blockchain.

Fintech, as in Fin(ancial) Tech(nology)

Broadly speaking, “Fintech” (Financial Technology) is any technology that is applied in financial services or used by companies to manage their finances. It’s been historically more of a “back-end” technology, helping organizations managing payments, investments, assets, insurances, etc.

Fintech became more visible to customers and end-users after the financial crisis of 2008: when you use PayPal, Apple Pay, Google Wallet or simply your credit card to make an online purchase, you the customer, the ecommerce retailer and the banks behind the money exchange are all using FinTech. And all of this happens in a very centralized paradigm.

Bitcoin: a (first) cryptocurrency on the Blockchain

“Blockchain” is a storage and transmission technology which is transparent, secure, and functioning without a central control body. By extension, a blockchain is a database that contains the history of all the exchanges made between its users since its creation. This database is secure and distributed: it is shared by its different users, without intermediaries, which allows everyone to check the validity of the chain.

“Bitcoin” is a type of digital currency in which encryption techniques are used to regulate the generation of units of currency (i.e. “cryptocurrency”) and verify the transfer of funds, operating independently of a central bank. Bitcoin uses the Blockchain technology to store and verify ownership of funds in an autonomous, decentralized manner.

Distinct, but complementary

There is obviously a lot of activity around Blockchain in Financial services companies. Banks, insurance companies, even trading companies and exchanges are finding innovative ways to integrate Blockchain technology to their portfolio of products and services. As such, Blockchain would be a part of Fintech, right?

Not so fast! Blockchain is already used by so many other verticals beyond Financial services: Internet of Things, Healthcare, Logistics, Entertainment, etc. Projects are springing up everywhere that take advantage of the decentralized nature inherent to Blockchain and are moving the technology beyond it’s payment origins (see Bitcoin: A Peer-to-Peer Electronic Cash System, by Satoshi Nakamoto

Fintech & Blockchain at Nuvoola

Nuvoola is a cloud services company delivering solutions that will provide businesses with insights and new opportunities. As such, we leverage the combined power of Blockchain, AI and the cloud to transform the way you deliver products and services. We support multiple industries: Financial services, Customer loyalty, Healthcare, Retail, etc.