🖤 Donations of all sizes power our public service journalism Give Now

Companies look to alternative to bitcoin technology

Molly Wood Dec 18, 2015

IBM, Wells Fargo and the London Stock Exchange Group — along with several other major companies — aligned with the Linus Foundation on Thursday to create an alternative to the blockchain, an online spreadsheet that supports the bitcoin currency and its transactions.

New York Times reporter Nathaniel Popper said it’s the blockchain technology that’s got others interested.

“The blockchain is what allows for bitcoin to move around different users of the system. [It’s] increasingly thought of as the most valuable part of bitcoin. This is the part of the bitcoin technology that Wall Street is getting excited about, that central banks are getting really excited about. It’s a new type of financial network,” he said.

Popper, the author of Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money, said that on the blockchain, bitcoin currency appears as a digital entry, and companies are seeing that other items can be written down as entries.

“The idea now is you can record other things on that database other than bitcoin, and take advantage of that network and the benefits it provides over credit cards, over stock exchange,” Popper said. “Essentially, the big benefit [is] it allows people to trade directly without a middle man. Much like e-mail cut out the need for the post office.”

He said the technology is still at a too early stage to be effective, but others see its value.

“Sure it’s something that is not well-developed for banks to be scared of. I think what banks see is its use, they pay other middle man when they trade stock as a technology they can use [blockchain] to cut down their costs. That’s why you see every bank on Wall Street in blockchain technology,” he said.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.