Bitcoin: IBM’s Latest Project Could Be Huge for Bitcoin

BitcoinIBM Sees Potential in Bitcoin

If you doubt bitcoin’s chances of success, this new technology could convince you otherwise.

Indeed, the technology has such potential that computer giant International Business Machines Corp. (NYSE:IBM) has just endorsed its creator, Blockchain Ltd. Blockchain’s technology purports to ensure transparency and security for bitcoin users.

IBM is setting a new standard for Blockchain software. Blockchain gives IBM stock a jolt of innovation that will help both the technology and IBM stock move toward take-off.

Blockchain is closely related to bitcoin, a cryptocurrency. Bitcoin is issued through a peer-based exchange system, devoid of any centralized control. Inventor Satoshi Nakamoto explained the basis in 2009. He suggested that in a bitcoin economy, there is no need to trust a person, company, body, regulator, or government; you just trust the algorithm.

IBM has just become the biggest backer of one of the technological pillars of bitcoin. IBM will begin testing its own variation of the software known as Blockchain. Its first target market involves customers who lease IBM’s computer hardware. (Source: “The Bitcoin Technology That Could Revolutionize Business,” International Business Times, February 16, 2016.)

IBM is way past the days when it dominated innovation in IT. Tech sector millionaires like Facebook founder Mark Zuckerberg weren’t even born when IBM started to lose sales to nimbler competitors. IBM stock has suffered consecutive bad quarters. The strong U.S. dollar and sluggish activity in China were to blame. However, IBM has long been looking for a breakthrough technology to boost sales.

Indeed, IBM still depends on large contracts for software. These take time to secure, and then the company needs to invest in new activities that show promising signs. Blockchain is one of the tools to rebuild the IBM brand. IBM stock can benefit significantly from the company’s venture into Blockchain technology.

One such way is through the “Internet of things.” For example, shipping companies can get information about products on the move in real time. Not only can Blockchain track a package, but it also tracks the condition of that package and determines how and where it was damaged. (Source: “IBM goes all in on blockchain, offers cloud-based service,” PC World, February 16, 2016.)

Blockchain is a database technology that powers bitcoin online currency. It logs any asset transfer in an encrypted “block” to a permanent and transparent chain showing every deal associated with that asset. (Source: “NASDAQ makes first share trade using blockchain technology,” The Telegraph, December 31, 2015.)

IBM also plans to offer new services. One of these will help software developers design their own Blockchain technology for computing devices. They will use IBM operating systems and RFID technology. The London and Tokyo stock exchanges want to use Blockchain code for trading activities. The NASDAQ and JPMorgan Chase have already adopted Blockchain.

First, IBM will contribute to Hyperledger, which is how the technology advances. IBM will also begin testing Blockchain with those leasing IBM hardware. The technology can also track inventory or manage international financial transactions. IBM customers (like banks) should soon be able to test Blockchain house solutions in London, New York, Singapore, and Tokyo.

Overall, the technology has almost unlimited potential, according to IBM: “The potential uses for blockchain technologies are varied including as an alternative to bookkeeping systems that still rely on paper. Other potential uses are seen in real estate, stock trading and international financial payments.” (Source: “The Bitcoin Technology That Could Revolutionize Business,” International Business Times, February 16, 2016.)

Most of IBM stock’s Blockchain initiatives will start as small-scale tests this year.