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NEW YORK: After all the clamor, the blockchain is due for a breakthrough in 2019. Banks and companies are gradually applying the technology versions of distributed registers associated with bitcoins to tasks such as regulation.
Demonstrating the usefulness of the blockchain, however, will say little about the value of the cryptocurrencies themselves.
The technology's potential for recording and sharing data instantly and securely captures the imagination of the corporate and financial sector and anti-establishment libertarians.
The ultimate dream of money that is free from the grip of banks or governments, while the former hopes to replace the aging of back-office technology, increase efficiency and reduce costs. Yet, a decade after the basics of the blockchain had been placed by the frantic Satoshi Nakamoto, no killer app emerged.
This is destined to change. Banks and exchanges have deep pockets and their development of authorized blockchain systems – limited to members of a defined group – avoids the heavy use of energy, the capacity constraints and governance problems that have plagued bitcoin platforms and upstart like electrooptical systems.
So far these efforts have demonstrated the effectiveness of blockchain for uses such as the settlement of securities or one-off transactions such as the $ 110 million bond (RM319.03 million) issued by the World Bank through a ledger distributed in August.
In October, the Depository Trust & Clearing Corp, the largest US securities trading processor, said the tests showed that blockchain technology could handle the daily peak in the US stock market of over 100 million trades.
At the beginning of 2019, Luxembourg banks should start using software from the Cambridge Blockchain Start-up to manage compliance with know-your-customer regulations.
Digital Asset Holdings, the company that was previously run by former JPMorgan Blythe Masters, is preparing to test its blockchain technology at the Australian Stock Exchange with the goal of replacing clearing and settlement systems by 2021.
Other projects of this type are in the pipeline.
Now that the boom in the first coin offerings, which raised about $ 20 billion (RM82.6 billion) in two years, has largely transformed into a collapse of cryptocurrency values and a repression by watchdogs, the companies venture capital could also channel capital more effectively into less flashy but more useful ideas.
The value of Bitcoin has plummeted from a peak of almost US $ 20,000 at the end of 2017 to less than US $ 4,000 a year later: the original virtual currency and its imitators may never become a reliable digital gold. But the blockchain applications that people can put to good use would be a beneficial by-product. – Reuters
