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Bitcoin group offers solution to blockchain speed bump for wider use

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Bitcoin group offers solution to blockchain speed bump for wider use

Potential usage of blockchain, thetechnology behind bitcoin, is almost limitless, but aspeed limit can be anobstacle to itsapplications in handlinghigh-volume transactions, such as foreign-exchange trades.

Thatshould not be the reason to abandon blockchain,according toLeonhard Weese, president of the Bitcoin Association of Hong Kong.

Blockchain, which acts like adecentralized ledger, canstore seven bitcoin transactions every second, compared to 80,000 for the Alipay online payment service, he said at The Asian Banker Summit2016 in Hanoi. But there are ways to work aroundthe shortfall.

Onesolution is limiting the number of entities that keep records on file, to thosewith licenses issued by central banks, Weese said.

Apartfrom that problem, possible applications of blockchain are vast.

Takebuying the rights to a film, for example.

"Therights to a movie include music, actor, producer and screenwriter portions in acomplex legal structure that determines who gets to receive the money and howit is distributed," Weese said.

Blockchaincan greatly simplify that process. It can hold legal records and paymentprotocols, allowing owners of different rights to receive payments directly,sell them or take out loans against such property.

Inbanking, thesoftware cansimilarly be applied to unraveling the structure ofderivatives, as well as reassuring clients worried about document forgeries when venturing into investments, Weese said.

Banksaround the worldhave been lookinginto using blockchain. Thoseefforts include a project named Hyperledger,involving lenders and technology firms that are working together to enable transfers of any type of asset among themselves.