International Business Machines Corp is considering using the blockchain technology to start a digital cash and payment system for traditional currencies.
The technology under Bitcoin, the blockchain, or so to speak a ledger or an open list of a digital currency’s transactions, may be used by IBM to develop Bitcoin alternative. This piece of news was reported in Reuters’ article without naming the source of information. This person didn’t want to be identified because of “a lack of authorization to discuss the project in public.”
Still, the company’s aim is to enable customers to make instant payments via the above-mentioned technology and at the same time make them save on transaction fees. Actually, the blockchain is the right technology to achieve this aim because of the fact that it allows users to transfer money anonymously and instantly, but without government regulation.
Reuters reports that the transactions would be in “an open ledger of a specific country’s currency such as the dollar or euro.” Moreover, it’s not going to be controlled by some company or bank.
“When somebody wants to transact in the system, instead of you trying to acquire a bitcoin, you simply say, here are some U.S. dollars,” the unidentified source said. “It’s sort of a bitcoin but without the bitcoin.”
It’s known that IBM is one of tech companies looking to expand the use of the blockchain technology beyond bitcoin. So, in January, the company issued a paper on the Autonomous Decentralized Peer-to-Peer Telemetry (ADEPT), a new decentralized Internet of Things system using the blockchain technology and wanting to change the way people use the internet-connected devices.
It is aimed at avoiding the key problems faced by internet users, among others low privacy, high costs and inability to change. The system provides a cheaper architecture for the Internet of Things.
The unknown source said to Reuters that informal discussions regarding a blockchain-linked cash system with some central banks took place. Unfortunately, the feds don’t have any comment on this fact.
Still, we can’t but mention that banks start appreciating the blockchain technology. So, in a report in September 2014, the Bank of England defined the blockchain’s open ledger as a “significant innovation” able to modify the financial system.
As for the IBM’s project, the source said that the proposed digital currency system would be controlled by central banks:
“These coins will be part of the money supply. It’s the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain.”
Possibly, the digital currency could be linked to a person’s bank account. A wallet software is likely to be used to integrate that account with the proposed digital currency ledger.
“We are at a tipping point right now. It’s making a lot more sense for some type of digital cash in the system, that not only saves our government money, but also is a lot more convenient and secure for individuals to use,” the source said.
next