Banks, tech companies move on from bitcoin to blockchain

Reuters | May 4, 2016, 12.49 PM IST

Bitcoin is by far the largest implementation of blockchain technology.Bitcoin is by far the largest implementation of blockchain technology.

NEW YORK: As a debate raged across the internet Monday over whether the mysterious founder of the bitcoin digital currency had finally been identified, executives at a major bitcoin conference in New York had a simple message: we’ve moved on.

That’s because bitcoin, the digital currency, has largely been supplanted by blockchain, the technology that underlies it, as the main interest of investors, technology companies and financial institutions.

“If there is a 100% opportunity in the blockchain, bitcoin, or the currency , is only 1% of it,” said Jerry Cuomo, vice president, Blockchain Technologies at International Business Machines Corp.

Bitcoin creator Craig Wright reveals identity

“So there is a whole 99% that has broad applications across the broad industries.”

Over the past year numerous Wall Street firms, led by Goldman Sachs, have declared their commitment to pursuing blockchain as a potential revolutionary technology for tracking and clearing financial transactions.

The blockchain technology works by creating permanent, public “ledgers” of all transactions that could potentially replace complicated clearing and settlement systems with one simple ledger.

Still, bitcoin is by far the largest implementation of blockchain technology and there is considerable debate as to whether one can truly develop without the other.

“Bitcoin is still the only blockchain-enabled, crossborder large scale, provable application that’s actually in production,” said Joseph Gu astella, a principal at Deloitte Consulting in New York.

“Bitcoin as a currency may not be as relevant as it was in many ways, but it actually is relevant as a proof case for the blockchain technology.”

Bitcoins are created thro ugh a ‘mining’ process, in which specialized computers solve complex math problems in exchange for bitcoins. One bitcoin is equivalent to $444.75 late on Monday and trade on various exchanges around the world. But bitcoin transaction volume has been in decline over the past six months amid a bitter split over technical changes in the protocol that are needed to increase the capacity of the system that produces them. Because the cryptocurrency has no formal governance, it relies on a core group of developers for direction and they are sharply divided over the changes.
But that debate was of relatively little concern to the Blockchain enthusiasts gathered in New York.

‘ECB to experiment with technology behind bitcoin’

Australian tech entrepreneur Craig Wright identified himself on Monday as the creator of controversial digital currency bitcoin.

“It’s irrelevant because his announcement doesn’t solve a problem or resolve a conflict,” said Bharat Solanki, managing director at Cambrian Consulting in New York. “It probably helps to determine the origins of bitcoin but only for recognition,” Solanki said.

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