Most people still think of Bitcoin as the virtual currency used by drug dealers and shadowy hackers looking to evade the authorities.
But the innovations that helped turn Bitcoin into the most popular virtual currency are now being viewed as a potentially enormous disruptive force for several industries, including accounting, music and journalism.
Nowhere, though, are more money and resources being spent on the technology than on Wall Street — the very industry that Bitcoin was created to circumvent.
“There is so much pull and interest on this right now,” said Derek White, the chief digital officer at Barclays, the British global bank, which has a team of employees working on about 20 experiments that explore how the technology underlying Bitcoin might change finance. “That comes from a recognition that, ‘Wow, we can use this to change the fundamental model of how we operate to create our future.’”
For people like Mr. White, Bitcoin isn’t just a digital token to use for online purchases. Instead, many of the top minds in finance have come to believe that the software that brought the virtual currency into existence also enables a fundamentally new way of transacting and maintaining records online — allowing people and banks to directly exchange money and assets like stocks and bonds without having to rely on a long chain of expensive middlemen.
Rose Law Group Partner Ryan Hurley comments, “I’ve long said that the bitcoin technology (i.e. the underlying software protocol) is far more disruptive than the Bitcoin currency and that it will change our world in very fundamental ways. Essentially any transaction which currently requires a trusted, independent third party in the middle to verify and record that transaction (e.g. banking, stocks, real estate, voting, wagers, etc.) will no longer require that third party. The bitcoin technology solves that problem and disintermediates a number of established industries.”