Rise of bitcoin tipped to put bite on banks

riseofbitcoin09 Dec 2013 / The Australian – The software system behind digital currency bitcoin is here to stay and may pose a real threat to banks, a currency innovation expert says.Bitcoin is a digital currency that is not tied to any national currency, but is controlled and stored entirely by computers spread across the internet. It is also a method to make payments.

Jem Bendell, from the University of Cumbria Business School in Britain, said bitcoin was part of a much bigger field of currency innovation known as private currencies, with over 5000 existing worldwide, including time banks.

“If you phoned up your bank and said ‘I have just logged in and seen that I have got $10,000 in my account, I would like to have you send it with an email to my laptop now’, they would think you were crazy because you can’t do that,” Professor Bendell said.

“They (banks) keep that ledger of who has got what and who is paying what to whom. So the banks maintain that they keep score for all of us worldwide.”

Speaking ahead of several public lectures on currency innovation in Australia, Professor Bendell said bitcoin showed that anyone could maintain the “global ledger” in a distributed fashion through any internet-enabled device.

“Unless banks work out how to relate to this idea of a distributed ledger where we can keep score, then this is definitely what is called a ‘disruptive innovation’, which could even put some of them out of business in the next five to 10 years,” he said…… Read more



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