For those who have been following the technology behind blockchains, you will probably know that they have something to do with digital cash and smart contracts. But what is the fuss all about? The initial burst of interest came when the consortium Consensus was formed by Blythe Masters, Tim Berners-Lee, and Roger Ver. The consensus was designed to create a standard protocol for public blockchains. This would allow users to transact directly with each other without having to go through a broker or intermediary.
At first, the use of this technology was restricted to only being used within banks. At that time, IBM was the primary supplier of this technology. Recently, however, the frenzy has been taking off and several big names are joining the bandwagon. For example, Google is teaming up with IBM to provide support for the IBM Bluemix operating system. Microsoft is also reportedly investigating an enterprise-grade ledger called Quixit.
But perhaps the most interesting announcement regarding the use of Blockchain technology has been the announcement by R3 Labs that they have developed a private key ledger system based on Blockchain technology. What is so unique about this announcement? In order to understand why this is so important, it is vital to understand how Blockchains work. Fortunately, I can help you with that.
In general, blockchains are networks that consist of several interacting users with differing needs, desires, and capabilities. The developers of the Blockchain technology took into consideration the needs of their target audience and tailored their system accordingly. If Wall Street wants to improve its ability to provide safe capital raising, improve the supply chain, and increase overall company security, then using a standardized ledger system is the way to go.
R3 is currently leveraging its technology to provide financial services. According to the official website, the distributed ledgers will allow banks to “re-model their own internal processes, building better ties with their customers and reducing risk.” Financial services companies are going to be able to improve their internal efficiency and better serve their customer base by using the applications built into Blockchain technology. The improved efficiency will result in better profits for both sides, resulting in more shareholder wealth and quarterly profits for IBM.
A couple of years ago, we predicted that the future of Cryptocurrencies would be the open-source ledger protocol known as the bitcoin ledger. As it turns out, the bitcoin blockchain is becoming a major force in financial service and finance. With IBM’s partnership with Blockchain, we can only expect further developments in this growing market. In my opinion, the future of Digital Currencies and Blockchains looks bright!