Beyond Bitcoin, the Blockchain Looms Large
Leaders at financial services institutions and the Nasdaq stock exchange are experimenting with the blockchain protocol for posting, clearing, and settling transactions.
In mid-2014, the Deloitte Center for Financial Services produced a report on bitcoin, a protocol for exchanging value over the Internet without intermediaries like banks or credit card companies. The report was spurred by a rapid rise in the value of bitcoin: Entities of various stripes were positioning themselves to develop services or products aligned to the cryptocurrency and its processing platform.
At the time, we posited that for bitcoin to enter the mainstream as a digital currency, several conditions would need to be met. Chiefly, it would have to exhibit greater price (or exchange rate) stability and entice merchants to accept the currency for payment through various digital and physical touch points. In addition, all parties in the financial ecosystem (including merchants, payment processors, and banks) would need to be able to trust the veracity, stability, and security of the system itself.
Some of these conditions continue to trouble the bitcoin ecosystem. The value of the bitcoin itself has cooled off from its high of more than $1,000 in December 2013 to about $240, and we continue to have concerns about security in the overall ecosystem.
But rather than focus too narrowly on the cryptocurrency itself, perhaps we should widen our scope to the blockchain, the public ledger on which all bitcoin transactions are recorded. We wrote in our paper last year, “While the protocol and public blockchain have been used to facilitate bitcoin transactions … the features enabling digital transfer of assets could
Originally appeared at: http://deloitte.wsj.com/cio/2015/09/15/beyond-bitcoin-the-blockchain-looms-large/