Chips Off the Old Blockchain

Bitcoin was created in 2009 to serve as a virtual currency system outside the controls of the government or a central bank. Since then, both the cryptocurrency and the underlying blockchain technology have attracted significant attention worldwide. Several companies already accept payment for goods and services in Bitcoin, with the attraction being low processing costs and ease of use in cross-border transactions. Currently, Bitcoin’s global market capitalization is less than $3.5 billion, according to Ron Quaranta, CEO of Digital Currency Labs and chairman of the Wall Street Blockchain Alliance. Yet there is sufficient interest for firms to create an expansive range of products and services around it. Some argue that the blockchain, an immutable record of title that describes the ownership of any type of asset, is more interesting than Bitcoin itself. Similar peer-to-peer technology approaches, known as distributed ledger systems, have emerged. These systems facilitate the movement of value and capital without going through an intermediary. Blockchain and distributed ledger technology could offer an entirely different way of engaging in commerce and could reinvent the way value and risk are shared between counterparties. There are potential applications in such areas as payments, trade finance, trading, clearing and settlement, physical property title transfers, and more. “There is going to be disruption, and I suspect there are going to be roles and capabilities that will become antiquated,” says Quaranta. “But that opens up an entirely new realm for business and for jobs.”