IBM is exploring the underlying technology behind bitcoin, called "blockchain," to create digital payments systems for major currencies. Instead of first turning dollars into bitcoins to make a transaction, the user would simply use digital forms of dollars or other government backed currencies. According to a source for the article below, "It's sort of a bitcoin but without the bitcoin." Which makes sense because one problem with the bitcoin is the bitcoin. Another problem is the lack of credibility and accountability of the exchanges. Both of these problems would be avoided with digital currencies controlled by central banks and platforms built by companies such as IBM. ~ Ilene
Exclusive: IBM looking at adopting bitcoin technology for major currencies
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Excerpt:
The objective is to allow people to transfer cash or make payments instantaneously using this technology without a bank or clearing party involved, saving on transaction costs, the person said. The transactions would be in an open ledger of a specific country's currency such as the dollar or euro, said the source, who declined to be identified because of a lack of authorization to discuss the project in public.
The blockchain – a ledger, or list, of all of a digital currency's transactions – is viewed as bitcoin's main technological innovation, allowing users to make payments anonymously, instantly, and without government regulation.
Rather than stored on a separate server and controlled by an individual, company, or bank, the ledger is open and accessible to all participants in the bitcoin network.
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Unlike bitcoin, where the network is decentralized and there is no overseer, the proposed digital currency system would be controlled by central banks, the source said.
"These coins will be part of the money supply," the source said. "It's the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain."
According to the plans, the digital currency could be linked to a person's bank account, possibly using a wallet software that would integrate that account with the proposed digital currency ledger.
[my emphasis in bold]
Full article: Exclusive: IBM looking at adopting bitcoin technology for major currencies | Reuters.
Picture source: Pixabay.
