Face of Banking May Change with the Bitcoin Technology
The banking industry of the world is taking keen interest in the crypto-currency underlying technology that can transform the banking sector. Even though bitcoin itself is not being used except a small set of transaction and is mostly linked to the underground economy, the blockchain technology that powers the bitcoin is gaining more recognition in the financial world. A blockchain can be defined as a scrambled "ledger" that is so secure that it cannot be influenced and is so transparent that anyone can get an accurate account of money and property. "The blockchain, which is the technology behind the encryption and e-certification, that is a technology which might very well be very useful," said Jamie Dimon, chairman and chief executive of JPMorgan Chase at a conference earlier this year, as reported by Phys.org
Leah Gerstner, vice president for public affairs at American Express, confirmed that the first investment by the financial group has been made in a company called Abra "as a way to get a better understanding of blockchain technology and explore its potential." Gerstner told AFP that "we believe blockchain technology is playing an important role." Blockchain came into existence in 2009 when the bitcoin and other virtual currencies emerged. These currencies are generated as a result of highly complex series of interactions amongst a colossal network of computers all across the globe. This currency does not have any government or central bank association yet, said Daily Times.
Due to ease of transaction and ability to be verified at any stage, blockchain technology can bring a paradigm shift in the conventional financial sector. "You can imagine a number of potential use cases for this technology in financial services across both business-to-consumer and business-to-business transactions-from international money transfers to stored value," Gerstner said, according to Venture Beat.