Thursday 17 March 2022 9:24 am

Do you have an API for that?

In the developing world of fintech, many platforms are based on application programming interfaces (APIs). These APIs are essential for offering your services to customers who want to consume machine-to-machine rather than through your website.. They have become the next big thing after offering their services through the web.

But while blockchain APIs are the inevitable next step in your digital service offering, they can also present specific problems and bottlenecks. Building your APIs takes time and money, not to mention talent, and these can be in short supply for a new start-up or incumbent.

weave api

APIs are designed to communicate bilaterally, and as more and more interfaces emerge, this problem becomes more and more complex.

The romance offered by open banking initiatives will never really come to fruition because of this data disconnect and cobwebs of bilateral connections. If APIs were designed to share data natively, this wouldn’t be a problem, but in reality, it’s an almost impossible task.

platform fatigue

Ultimately, this scenario has led to a serious case of “platform fatigue” among early adopters of the web and APIs in industries such as financial exchanges and property. Companies are tired of platforms being created that seek to pool their data and sell it to them as a value-added service. The new emerging philosophy is that a protocol should be vendor independent. Instead, providers agree on a mutually beneficial standard to follow, say USB-C instead of Apple’s Lightning cable, or perhaps more appropriately, how the success of the Internet was largely based on the adoption of TCP/IP over IBM. attempt to possess the protocol.

Fortunately, APIs, at least as we know them, don’t have to be the only option moving forward.

Enter the blockchain

Increasingly, startups are beginning to see that they are not simply dependent on the standard types of software that have permeated the status quo until now. Thanks to developments in recent years in both blockchain technology and smart contracts, there are all kinds of new services and platforms that developers can take advantage of for a wide range of purposes. These platforms not only do a better job than legacy software, they also do it more cheaply and provide more accessibility than many comparable tools being sold for use in cryptocurrency markets today.

The decentralized global computers underlined by blockchain projects including Ethereum and Corda already have a plethora of software offerings that are not hindered by any single entity.

Most importantly, blockchains, when set up correctly, can offer a unique system that can share data, handle states, run applications, support your digital wallet, and more. Blockchain networks are cheap to use, transparent, and trustless, which alleviates many of the moving parts issues seen in today’s API landscape.

Blockchain overcomes two-sided cryptocurrency API connections and offers an open and distributed communication industry rather than the rush to build another platform in an industry that already has platform fatigue.

To be sure, there are and will continue to be some obstacles along the way. On the one hand, companies need to understand that there is a big difference between creating a cryptocurrency and the true potential of blockchain technology for cryptocurrency exchanges. education about what are decentralized applications, how do they work and how can they be implemented will take time to be absorbed by everyone. It will also be important to understand the limitations and potential issues as blockchain technology will take time to mature and converge.

Then there are the regulatory concerns. Considering that the world of decentralized technology and blockchain protocols is so new, and many of these services have financial assets embedded in them, it can be difficult to predict how government agencies might monitor or legislate their use.

Will APIs continue to be an important part of moving the industry forward? Without a doubt, but these programming interfaces will be updated and evolve thanks to the possibilities of blockchain and may no longer be the only solution for sharing data between companies.

About the Author

Richard Crook is the former Head of Emerging Technology at Royal Bank of Scotland, with a career spanning over 20 years specializing in leading teams to shape and deliver maximum business benefits through technology solutions for the largest financial services institutions. Richard became COO of BCB Group in 2022 following the acquisition of LAB577, a software company at the nexus of financial services and emerging technology, which he founded.