As reports emerge of further instability in Bitcoin rival Ethereum, US tech giant International Business Machines Corp (NYSE:IBM) has revealed plans to take blockchain into the corporate mainstream.
Evidently, the moves would take the disruptive home-brewed financial tech behind cryptocurrencies like Bitcoin into one of the first implementations within the institutional banking system.
IBM’s Digital Trade Chain is intended to assist international trading for small and medium sized enterprises (SME).
Blockchain is the key component of alt-currencies like Bitcoin and Ethereum, but its potential applications are much broader than these initial breakthrough examples.
In essence, block chain is a synchronized, real-time ledger existing across a network of computers and it comes with an inherent validation system. Due to its construction and structure, it is seen as a highly secure and supposedly tamper-proof system for keeping track of transactions.
IBM’s Digital Trade Chain intends to track and manage international transactions for SMEs, on behalf of banking service providers.
In a CNBC report, Radobank chairman Wiebe Draijer explained that the banks would still take care of the ‘old payment technology’ whilst the infrastructure and administration of the international trading would be “done on the blockchain”.
Ethereum underlines human insecurity surrounding cryptocurrency
Whilst the block chain is seen as a secure system, the facilities and set-up around trading the cryptocurrencies like Bitcoin have had a number of high profile frailties – the most recently being the extreme volatility of Ethereum, a rival to Bitcoin.
Last week, the value of Ethereum reportedly crashed on the GDAX exchange, plummeting from around US$320 down to just 10 cents in a matter of moments as a “multimillion dollar sell” executed and triggering a series of auto-ordering across the exchange.
The price snapped back thereafter, back to similar pre-crash levels.
More recently, on Monday, the value of Ethereum was again subject to further volatility, dropping some 20% and there had also been impacts from internet rumours that the cryptocurrency’s founder Vitalik Buterin had died (which he dispelled, by tweeting a verifiable photo of himself on Sunday).