Allegedly, Bitcoin is associated with drug peddlers and other ill minded traffickers. This has made people to shy away from using the crptocurrency. However, IBM is not shaken by the now famous tribulations directed to Bitcoin.
The company has shown interest in the mechanism bitcoin uses to publicly record transactions (blockchain). According to cnet, today’s businesses each have their own records, slowing transactions and triggering problems figuring out who’s right when there are disagreements. But the blockchain approach is more cooperative by providing a consistent record that members of a network can see.
“The blockchain is about distributed trust,” said Arvind Krishna, a senior vice president at IBM Research’s Almaden lab.
The mechanism uses a shared ledger, a database spread across several linked computers so no single company has sole control. Encryption technologies govern data to make it clear who paid whom and why.
“The system establishes trust, accountability and transparency while streamlining business processes. It is a design pattern made famous by bitcoin, but its uses go far beyond. With it, we can re-imagine the world’s most fundamental business interactions and open the door to invent new styles of digital interactions. It has the potential to vastly reduce the cost and complexity of cross-enterprise business processes.
Blockchain allows securities to be settled in minutes instead of days. It can also be used to help companies manage the flow of goods and related payments, or enable manufacturers to share production logs with OEMs and regulators to reduce product recalls.” IBM writes.
IBM plans to start using blockchain in its own financing business starting in September, easing difficulties that crop up in purchases involving a dealer, a manufacturer and a customer. The company says disputes bog down 25,000 of the 2.5 million transactions between IBM’s clients. Those disagreements could include which tax rate to pay or which products were actually ordered.
“We believe half the disputes can be resolved automatically,” Krishna said.