Wall Street turns to bitcoin technology as Nasdaq invests in Chain.com

Global majors Citi, visa, Nasdaq and other companies have invested $30 million in Blockchain startup Chain.com, which offers services to enterprise market in the bitcoin technology segment.

Former American Express CEO Jim Robinson III has also joined the board of directors at Chain.com, which is estimated to be worth $150 million based on series B round of funding.

The list of other investors includes Capital One, Fiserv and French telecom Orange. The French telecom major sees potential for Blockchain in strengthening mobile payments.

The San Francisco-based company Blockchain acts as a public distributed ledger for transactions in bitcoins, a virtual money, by recording and verifying network nodes. The investment made by Nasdaq is considered as a latest sign of Wall Street's sudden shift towards Bitcoin, the virtual currency system was earlier not favored by banks and financial institutions.

Now, the financial institutions' top priority to finish the transactions in cost effective and hassle-free manner. They're not bothered about using the actual currency. Financial institutions and banks consider Blockchain technology enables users of bitcoins to immediately execute transactions replacing cumbersome, costly less secure processing system.

The Blockchain is a record of every transaction in bitcoin. It's not a central database system for bitcoins. It comprises several networks spread across the world and verified continuously by participants on the network.

Jean-Jacques Louis, Sr Vice-President (strategic initiatives) at Nasdaq, said: "We believe in the company and we think it's important to be closer to the technology being developed. We're putting our money where our mouth is in following and backing the company's continued success and development.'

Earlier, Chain.com announced that it was working with Nasdaq. Using its distributed ledger technology, Chain.com will test the trading of share in private companies as part of pilot project to be initiated in November this year.

The transactions in bitcoins are executed in just seconds rather than over three days and tedious processing time involved in traditional intermediaries. The latest investment made by Nasdaq indicates the gaining popularity of the new virtual currency system in the Wall Street.

Adam Ludwin, CEO of Chain.com, said: "We believe in the power of Blockchain technology to transform how financial assets are transferred, but it has to be done with the right partners to insure it gets off the ground."

Bitcoin technology will reduce the processing time considerably. Most of the buying and selling transactions in stock markets are done by credit cards and this consumes a lot of time and involves several steps of intermediaries. Adding to this cost is also high.

Bitcoin technology enables customers to overcome all these time consuming process and it's gaining popularity among Wall Street players. It could take long time for majority of financial institutions agree to the new protocol system for process and clearing transactions.