Bitcoin: Blockchain-Ledger Technology Catches Attention of Wall Street and Financial Companies
Instead of pushing for mainstream dominance, many companies are looking to bitcoin for back-end processing solutions.
In particular, Wall Street has taken notice of the potential behind blockchain-ledger technology, the network that manages and powers the digital currency worldwide.
“It’s an opportunity for Wall Street to streamline some operations that are pretty antiquated,” mentioned Duncan Niederauer, the former chief executive of the NYSE Euronext and adviser to TeraExchange, the first Commodities Futures Trading Commission-regulated bitcoin derivatives platform.
In the past decade, traditional banking pathways have become a hindrance for fast-moving businesses. Slow processing times, costly transaction fees and lack of flexibility have forced establishments to rethink their financial strategies.
The use of blockchain ledgers, a verification system that is updated meticulously by a network of computers, makes peer-to-peer transactions transparent and safe for businesses and consumers. Payments using this method do not go through a bank, or other bridging institutions. As a result, fulfillment time is greatly reduced, as well as costs.
“The price of handling bits [of data] has come down by a factor of 10,000 fold over the last generation; it’s high time that the costs of payments processing fall by a factor of even two. Bitcoin offers the prospect of necessary and important disruption in finance for the benefit of buyers and sellers rather than financiers and middlemen,” said former U.S. Treasury Secretary Lawrence H. Summers.
One of the biggest questions surrounding bitcoin technology is whether or not it can be scaled to meet the demands of the global market. At the moment, the digital currency’s transaction volume averages at $50 million daily.
To be suitable for mass payments and trading, the network has to be able to handle average daily transaction volumes ranging in the trillions (USD).