For people active in the Bitcoin ecosystem, some days appear as if they were taken out of a telenovela at certain times. One of the recent topics of heavy debate is whether or not the Bitcoin block size should be increased, and if so, in what capacity. Additionally, there is still the mystery surrounding the creator of Bitcoin, who goes by the name of Satoshi Nakamoto. Wall Street isn’t worrying about any of these squabbles, though, as the financial sector is showing increased interest in Bitcoin and digital currency.
Bitcoin Squabbles Don’t Matter For Wall Street
There is a major difference between caring about the technical aspect of Bitcoin, and its future implications for society as we know it today. Regarding the ongoing blocksize debate, which was recently touched upon during the Scaling Blockchain conference in Hong Kong, there is still no official consensus on a solution.
Over the past few weeks, mainstream media outlets have been trying to expose Satoshi Nakamoto – the creator of Bitcoin – for the umpteenth time. Truth be told, it shouldn’t really matter who is responsible for creating Bitcoin and blockchain technology, although the mystery is alluring to certain people.
Wall Street investors are not worrying about either the block size debate or revealing Satoshi Nakamoto’s true identity. What these people care most about are the ideas that are behind Bitcoin, such as decentralization, bringing financial services to the unbanked, and seeing what else blockchain technology can be used for in the future.
Just last month, Goldman Sachs surprised the financial world by announcing SETLCoin. As you would come to expect, SETLcoin will be an in-house developed virtual currency, and will – most likely – serve as a tool to deliver securities with less risk of fraud compared to current solutions. That being said, Goldman Sachs declined to comment on the exact purpose of SETLcoin for the time being.
Creating a new virtual currency is just an example of why financial institutions value Bitcoin so much. Or to be more precise, they value the underlying blockchain technology, which provides unprecedented transparency. Combine this with the ability to move funds around the world in a matter of seconds, and anyone can start to see its benefits.
But perhaps the biggest benefit of Bitcoin technology is how users can move units of account to other users while being automatically provided with the authenticity of the transaction itself. Computers lending their computational power to do constant number crunching will verify every individual transaction, and either accept or reject it on the network.
Every individual unit of account being transferred on a blockchain-based network has its own unique identifier, making it impossible to counterfeit the currency being used. Plus, all transactions are recorded in a public ledger, visible for anyone in the world and updating in real-time.
Consult Hyperion Director of Innovation David Birch stated:
“Financial institutions are keen to adopt some of that ethos. All the narratives about the great financial crisis contain very specific issues about the lack of transparency. A shared ledger answers transparency.”
What Is Next For Bitcoin & The Blockchain?
While Wall Street does not seem to be bothered by any of the internal squabbles going on between Bitcoin community members, the question remains how things will evolve from this point forward. There is no denying that blockchain technology is getting a lot of attention, even from a group of financial institutions who have formed the R3 blockchain consortium to develop institutional solutions.
Bitcoin, on the other hand, is trucking along nicely as well in the meantime. The number of network transactions keeps increasing, which indicates people are actively moving funds around for certain purposes. Events like Bitcoin Black Friday certainly help to put the popular digital currency on the map and into the minds of consumers all around the world.
However, there is still a long way to go until Bitcoin can reach the status of a “mainstream form of payment.” On a global scale, the number of Bitcoin users is still fairly low, although there are quite a few businesses accepting digital currency payments. Consumers need to be made aware of the advantages and opportunities Bitcoin presents before the financial sector can be shaken to its core.
What are your thoughts on Wall Street’s approach to Bitcoin and blockchain technology? Let us know your expectations for 2016 in the comments below!
Source: San Francisco Chronicle
Images courtesy of Shutterstock, USA Today, bitcoinsin.nyc
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