Goldman Sachs is bullish about blockchain, the underlying distributed ledger technology that powers the cryptocurrency – Bitcoin.
Leading investment banking firm Goldman Sachs has – in a research note sent to clients today – raved about the decentralized platform by stating that “the Blockchain, can change…well everything.”
In a report by Business Insider, the bank sent its “Emerging Theme Radar” note to clients on Wednesday. The note, titled ‘Themes, Dreams and Flying Machines’ has deemed that the blockchain is “taking center stage” these days, noting that it is pulling the spotlight away from Bitcoin.
Goldman Sachs’ analyst and author of the note Robert D. Boroujerdi explained the working of the blockchain with the following diagram:
The report added:
[It’s] promising an ushering in of a new set of tools to cut costs and challenge the profit poll of the middle-man with a promise to make centralized institutions obsolete.
By taking on the middle-man with lowered costs than legacy systems, blockchain technology cuts out the need for a “trusted middleman” such as a bank to make transactions more seamless, secure and quicker than the systems used by banks currently.
The author also states that the blockchain has the potential to redefine transactions and the very infrastructure supporting the trade across a varied range of industries. Industries and applications such as banking, voting systems, gun checks, academic records, vehicle registrations, trade settlement and the cataloging of ownership of works of art are all highlighted as cases where blockchain technology could make a difference.
The bank also stated some drawbacks with the radical new technology. The potential costs involved during the development and maintenance of the decentralized network is one. The other is a lack of a regulatory framework.
The author contends the idea that the Blockchain has outgrown Bitcoin. Boroujerdi states:
Bitcoin was just the opening act, with the Blockchain ready to take center stage.
The note comes soon after the bank filed a patent for a securities settlement platform based on SETLcoin, a new cryptocurrency.
A global blockchain consortium of 30 major banks, led by New York-based R3 are also looking into the potential and future applications of blockchain, which goes to show the appeal of the technology that powers Bitcoin.
A summary of all the technologies and topics covered by the note that includes blockchain can be read here, courtesy of the Wall Street Journal.
Images from Shutterstock and BI.