The technology that powers the cryptocurrency bitcoin could soon become much more important to the global financial system.
NASDAQ is planning to pilot a new transaction-tracking system on one of its smaller markets that makes use of blockchain technology, a key component in the bitcoin system. A blockchain is a public ledger that keeps track of transactions within a digital currency by logging them across various computers. The computers work in tandem to ensure the authenticity of a transaction. This automated process allows for transactions to be decentralized from a central bank or money issuer, which speeds up the rate at which a buy or sell can occur.
Instead of using bitcoin, NASDAQ will apply this technology to securities bought and sold on a market for private companies. Shares in these companies are often bought and sold using a slow, informal system in which lawyers must manually verify transactions, according to the Wall Street Journal. The blockchain could significantly increase the pace at which trades can be executed.
NASDAQ calls the plan to use blockchain technology an “enterprise-wide initiative.” The financial sector has expressed a keen interest in bitcoin and its tech. The New York Stock Exchange and Goldman Sachs, among others, have already invested in bitcoin-related companies. Even if bitcoin fails as a currency, many observers have said the blockchain technology behind it could have promising use cases in finance and other fields.
- Taylor Swift Is TIME's 2023 Person of the Year
- Why Cell Phone Reception Is Getting Worse
- Why It’s OK to Say No to That Party You’re Dreading
- COP28 Is a Business Bonanza. Should It Be?
- In a New Movie, Beyoncé Finds Freedom
- Column: When India Was a Human Rights Leader
- The Top 100 Photos of 2023
- Want Weekly Recs on What to Watch, Read, and More? Sign Up for Worth Your Time
