FinTech Startups Are the New Kids on the Blockchain

Fintech startups looking to cash in on blockchain technology need to fill software developer positions in a hurry. Momentum towards deregulated use of distributed ledger systems for international financial transactions is driving demand for new consumer banking applications.

If this sounds like nonsense, think of it as Bitcoin for commercial banking.

Hashing out real-world currency

Ever wonder how Bitcoin maintains user anonymity and account accuracy at the same time? This is what blockchain protocol does--it manages a decentralized global network of database nodes that passes transactional data from one account to another. Block by block--or node by node--each touch adds encryption to the chain. The other nodes verify the chain’s integrity at every step with algorithmic consensus-making.

Blockchain moves money faster across borders and currencies, and it takes a lot of the bookkeeping burden off banks. This makes it extraordinarily appealing.

Economists say blockchain can save the free market, others see big bank involvement as reinserting the middle man that cryptocurrency intended to wipe out. Pick your narrative.

Indeed, Bitcoin was the trial run. After eight years, the technology is accurate enough for the Swiss financial governing bodies to work with.

Everyone wants to be the PayPal of distributed ledger

In October, the largest respective banks in India and Dubai reported launching a program for blockchain trade and remittance transactions, designed to accommodate migrant workers sending money back home. The front end is built into a mobile app called Finacle, which is made by the Indian software firm InfoSys Edgeverve. It represents a landmark in the fintech industry.

In the U.S. and Europe, the race is on between the big boys and the startups. Microsoft is working on an Azure-based blockchain solution with Merrill Lynch and Bank of America. IBM Blockchain has announced several partnerships with Asian financial institutions. The global venture economy has put $1.4 billion in blockchain startups, according to the German consultancy firm PwC, a big-time advisor to the European startup scene in Belfast, Northern Ireland.

Mixing old and new is never easy

The near-term challenge for software developers is linking legacy banking systems to cloud-based P2P networks. Companies need talent that knows their way around distributed networking and cryptocurrency, and can work within the parameters of clunky accounting infrastructure and personnel.

There’s a bi-coastal shootout for talent in U.S. fintech between companies in the Bay Area and NYC. Entry level full stack engineers, analysts and QA engineers are looking at six figures-plus, no college necessary if the coding chops are there. Five years of applicable experience fetches a CTO position paying in the neighborhood of $300K annually.

Candidates should have a solid open source foundation, plus experience with prevalent distributed token platforms and smart contract programming languages.

• Etherium/Solidity
• Stellar (open source)
• Ripple (open source)
• Hyperledger (open source)

Check out fintech jobs in blockchain on Cybercoders.

What does this mean for the industry?

Banks will be outsourcing infrastructure and bookkeeping to software companies if this goes according to plan, freeing up resources for growth and investment.

Nothing too disruptive.

In fact, it is more of the same: In time since e-commerce and online banking became mainstream it is more inconvenient than ever to change banks because it means updating card information in all those apps you have. Alternative technology for money-changing has never pried itself away from major financial institutions.

Solving the longer-term challenge for P2P remittance transfers--that of platform agnosticism--looks like the next chance to disrupt the commercial banking industry.

Adam Lovinus is a technical MarCom specialist based in Orange County, California.