Visa Inc (NYSE:V) And Others Trying To Make Blockchain Palatable For Banks
Visa Inc (NYSE:V), Citigroup Inc (NYSE:C), Capital One Financial Corp. (NYSE:COF) and a host of other players in the financial industry have been collaborating with San Francisco startup called Chain to create a type of blockchain technology that is suitable for their industry. They have already covered much ground and perhaps the coming months would see a steady flow of blockchain products from banks and other financial institutions. One of the areas Chain and its partners delved much on was the privacy of blockchain transactions.
Blockchain is a ledger of financial transactions and it is the technology behind the crypto-currency Bitcoin. While blockchain had the potential of simplifying financial transactions and allowing banks to operate more efficiently, the fact that its records are public made financial institutions hesitant to adopt it. Chain noticed this limitation and decided to fix it. But it needed partners to get that done and that is when Visa Inc (NYSE:V), Citigroup and several others got into it.
Privacy and transparency
Chain created an open source protocol called Chain Open Standard (Chain OS) for blockchain transactions. With Chain OS, blockchain network can be used to run secure and private transactions. Additionally, Chain OS makes it possible for blockchain network to handle a large volume of transactions.
Chain OS is built in such a way that it guarantees privacy for users but also enables regulators to do their work.
Visa Inc (NYSE:V) and Citigroup are not only clients of Chain, but they are also investors in the startup. Other investors in Chain are Capital One, NASDAQ and First Data Corp (NYSE:FDC) among others. Chain was valued at more than $130 million after its last funding around.
The enriched blockchain technology that Chain has developed is capable of processing tens of thousands of transactions per second. With that Visa Inc (NYSE:V) can significantly boost its own transaction capacity that is currently capped at a maximum of 65,000 transactions per second.
Why open source
Chain decides to create an open source blockchain protocol so that others can also contribute to making it better. Although Chain OS is freely available, the creator hopes to make money through other means such as creating software capable of implementing standards on the platform.
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