itBit Confirms Not Using Bitcoin for its Banking Project


itBit Confirms Not Using Bitcoin for its Banking Project — New York-based Bitcoin exchange itBit recently confirmed to eradicate Bitcoin from its upcoming Bankchain project.

The Nasdaq-powered company, which had kept the said project under wraps, marginally discussed it during a one-day private summit, attended by some of the biggest Wall Street personalities. As it turned out, Bankchain is a private shared ledger system for financial institutions, which borrows from Bitcoin and blockchain, but claims to be different than them.

itBit’s senior vice president Steve Wager explained their reasons to avoid Bitcoin and Blockchain in their new project, saying that they had researched the technologies thoroughly but eventually decided to create their own system to ensure authority of the private companies.

“Financial services firms,” he told IBTimes, “cannot use the [bitcoin] blockchain and that is primarily because of the validation protocol, meaning that a company like JP Morgan for example, wouldn’t be able to allow new risk into current processes by having unknown parties clearing their transactions for them or validating their transactions over the blockchain and as a result there’s the need for [permissible] ledgers.”

For Bitcoin, Wager believed the digital currency was comparatively a way-too independent than what they were trying to create. In his opinion, a platform like Bankchain would be better with a native token, which is unlimited and valueless. They have, therefore, decided to employ their own “itBit” tokens as the digital asset for Bankchain.

From the way it looks, all itBit did was replicate the entire blockchain technology, but leaving its decentralization features to suit the needs of private financial institutions. We will still have to follow a wait-and-see approach, as the company is seemingly very secretive about their project.