Andrei Kirilenko

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The new Topics in Fintech Innovation elective is led by Dr Andrei Kirilenko, a recognised world expert in high frequency and algorithmic trading. Dr Kirilenko’s previous experience includes teaching as a Finance Professor at the MIT Sloan School of Management and serving as Chief Economist of the U.S. Commodity Futures Trading Commission. He is also the Director of the Centre for Global Finance and Technology at Imperial College Business School.

The new elective is available to students on all four of the Business School’s finance master’s programmes and will focus on building students’ understanding of blockchain and its applications, digital payments and financial inclusion, and technology and infrastructure solutions. Students will learn from industry experts and visit accelerators and labs in and around London. This elective is one of the latest developments in the Fintech education and research community at Imperial. Students can also build their knowledge and network in Fintech by taking part in numerous Fintech events taking place at the Business School, and the student-run Fintech Club.

In this interview, Dr Kirilenko explains the basics of blockchain and his hopes for the new elective:

What will students gain from studying the Topics in Fintech elective?

The new Topics in Fintech Innovation elective will focus on how new technologies, particularly those involving blockchain, can satisfy clear business needs in terms of creating value and managing risks. At present, lots of technologists are running around London offering super sophisticated crypto solutions without clearly explaining how these solutions can help businesses. My hope is that this elective will help bridge that gap and create a new generation of business leaders and Fintech entrepreneurs.

What is blockchain and how does it work?

Blockchain, or public distributed ledger technology, is computer code that literally anyone with a computer or a smartphone can use to create, exchange and record value. This computer code utilises advances in cryptology and computer science to protect the identities of users, but prevents them from cheating each other or the system as a whole (the later through a so-called consensus mechanism). This means that value can be created and protected by computer code alone without permission or approval from governments or banks.

Why is blockchain so revolutionary?

A very useful side effect of blockchain technology is a complete, immutable and freely observable record of transactions among the users of the underlying computer code. This is as revolutionary as the internet has become for the creation, exchange and recording of information. In liberal democracies, anyone with a computer or a smartphone can set up a website, start a blog, or to post an image without permission from a government or a news organisation. Blockchain is sometimes referred to as the ‘Internet of Value’; it is a useful but highly restrictive metaphor. Just as a handheld computer is called a smartphone, but it is so much more than a phone. 

How is blockchain being used and where is it headed?

There is a lot of experimentation going on right now in the blockchain space. Incumbents like banks, insurance companies, asset management companies, stock exchanges and so on would like to insert themselves into the public computer code. They are trying to figure out how to either control the computer code through standards, patents, regulation and so on or control who gets to use the code by issuing permissions or, ideally, both control the code and be the gatekeepers of its use. If they manage to do that, they will make everyone pay them for “providing this service.” But the cat is already out of the bag, in that the blockchain code is already public and very widespread, so this effort will probably fail.

Challenger Fintech companies, on the other hand, are experimenting with different identity, consensus, and value transfer protocols. Hopefully, they will come up with some solutions that appeal to lots and lots of users and the regulators will be flexible and overlook these technological solutions until the point when they cannot be stopped easily by pressure from incumbents.

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