In brief
- Practitioners should understand blockchain technology and its position as a burgeoning influence on the areas of financial crime and money laundering.
- In a post-coronavirus landscape, there is little sign that use of blockchain to facilitate and fight money laundering stands to increase.
What is blockchain technology?
The blockchain system is a form of distributed ledger technology (DLT). Unlike centralised data storage, DLT allows for data to be shared and stored in multiple locations while being updated contemporaneously across the network.
The blockchain protocol allows the addition of information to a digital ‘chain’ formed by individual ‘blocks’. The blocks consist of a completed transaction’s information. The information is not kept in a central location and is public. Once added to the chain, a block cannot be altered or removed, making the system immutable (Michael J Casey and Paul Vigna, ‘The Truth Machine: Blockchain and the Future of Everything’ (first published 2018, HarperCollins, p181))
There is a distinction between Bitcoin the technology and Bitcoin the cryptocurrency or exchange
