Banks leap on Bitcoin’s technology – International | IOL Business

An Apple iPhone 5 displays the Bitcoin Wallet smartphone app. Underlying the digital currency is the blockchain, a record of all transactions that is updated every 10 minutes and distributed across multiple servers. File photo: Bloomberg.

London – A year ago, bitcoin was widely dismissed as little more than a way for drug dealers and terrorists to move money around anonymously.

Now, some of the world’s biggest banks and companies are buying into the technology behind it.

Underlying the controversial web-based “cryptocurrency” is the blockchain – a massive ledger of every bitcoin transaction ever made that is verified and shared by a global network of computers.

No tampering

But the data that can be secured by the blockchain is not restricted to bitcoin transactions.

Any two parties could use it to exchange other information, including stock deals, legal contracts and property records, within minutes and with no need for a third party to verify it.

Backers say it could cut out the middleman and help fight corruption, as the process by which the data is secured makes it virtually impossible to tamper with.

Banks reckon the technology could save them money by making their operations faster, more efficient and more transparent.

But these are early days – bitcoin was invented just six years ago – and the blockchain is still being experimented with.

As is

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