The technology that powers the cryptocurrency bitcoin could soon become much more important to the global financial system.
NASDAQ is planning to pilot a new transaction-tracking system on one of its smaller markets that makes use of blockchain technology, a key component in the bitcoin system. A blockchain is a public ledger that keeps track of transactions within a digital currency by logging them across various computers. The computers work in tandem to ensure the authenticity of a transaction. This automated process allows for transactions to be decentralized from a central bank or money issuer, which speeds up the rate at which a buy or sell can occur.
Instead of using bitcoin, NASDAQ will apply this technology to securities bought and sold on a market for private companies. Shares in these companies are often bought and sold using a slow, informal system in which lawyers must manually verify transactions, according…
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