Turkish banks, wake up!
Bitcoin is a mystery to many of us. We all heard about it but we don’t know exactly what it is and how it can be used. We all heard rumors that bitcoin is mainly used by criminals to move wealth across borders without the banking system.
The definition of bitcoin is as follows: Bitcoin is a payment system invented by Satoshi Nakamoto, who published the invention in 2008 and released it as open-source software in 2009. The system is peer-to-peer; users can transact directly without needing an intermediary. Transactions are verified by network nodes and recorded in a public distributed ledger called the block chain. The ledger uses its own unit of account, also called bitcoin. The system works without a central repository or single administrator, which has led the U.S. Treasury to categorize it as a decentralized virtual currency. Bitcoin is often called the first cryptocurrency, although prior systems existed. Bitcoin is more correctly described as the first decentralized digital currency. It is the largest of its kind in terms of total market value.
Bitcoins are created as a reward for payment processing work in which users offer their computing power to verify and record payments into the public ledger. This activity is called mining and the miners are rewarded with transaction fees and newly created bitcoins. Besides mining, bitcoins can be obtained in exchange for different currencies, products, and services. Users can send and receive bitcoins for an optional transaction fee.
There are thousands of people involved in the bitcoin ecosystem. However, until recently the whole ecosystem was somewhat stained by the allegations about the identity of its biggest users. Newspapers were writing that bitcoin was an invention of criminals. Bitcoin users were detained by police in a few incidents.
However things are changing and bitcoin is becoming more and more legitimized every day. The biggest banks in the world are trying to find out ways to utilize the bitcoin phenomenon.
According to coindesk.com, “While major institutions found that bitcoin was perhaps problematic as a currency, they seem to increasingly believe that the blockchain, the protocol that manages and facilitates the exchange of bitcoin, offers benefits over their closed database systems. With this in mind, big financial players have begun to come forward by discussing experiments with the bitcoin blockchain and other decentralized ledgers.”
According to Reuters, “Nine of the world’s biggest banks, including Goldman Sachs and Barclays, have joined forces with New York-based financial tech firm R3 to create a framework for using blockchain technology in the markets, the firm said on Sept. 13, 2015.”
It is the first time banks have come together to work on a shared way in which the technology that underpins bitcoin - a controversial, web-based “cryptocurrency” - can be used in finance.
Over the past year, interest in blockchain technology has grown rapidly. It has already attracted significant investment from many major banks, which reckon it could save them money by making their operations faster, more efficient and more transparent.
It is clear that banks will be using in the coming years.
I wonder if any banks in Turkey are thinking about what will happen when bitcoin disrupts their industry. Will they be joining forces with the biggest in the world to shape the technology or will they try to imitate it?