Bitcoin’s resurgence has been something to note recently, but it is the prospects and possibilities of the blockchain that is the real story this year and could be the story of 2016 as well.
The blockchain is a decentralized online ledger that records transactions. Some of the largest banks in the world are investing large sums of money into blockchain technology and applications. UBS has a blockchain research laboratory in London. UBS is currently working with Barclays and BNP Paribas on Ethereum, a blockchain-backed virtual machine for user services. Citigroup has three labs and has created three blockchains and currency of their own called Citicoin. While banks like Santander, Bank of England, and the Deutsche Bank have all formally expressed interest in using blockchain to simplify banking. In addition, the Nasdaq OMX uses blockchain to oversee the safe exchange of private stock, and online juggernaut Overstock.com has built a system that will give companies the power to borrow securities via blockchain.
The technology of blockchain is valuable because it allows a secure and reliable exchange of money and assets. A wire can take three to five business days and come with hosts of penalties; whereas, blockchain happens in real time. With this level of speed and security, the blockchain is a valuable idea.
A recent research report by Tabb Group said that blockchain-powered systems are only a matter of when, not if. IBM is creating a new decentralized ledger apart from the blockchain and open-sourcing the code. This new project could challenge the fintech and take it new directions. It is clear that for this technology to take off standards and regulations will be need to be hammered out. However, the possibilities of the blockchain are real and big names are taking notice.
DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer