While the so-called FANG companies – Facebook, Amazon, Netflix, and Google, are all the rage these days, IBM was the original tech titan. The IBM name was so closely associated with computer technology that it enjoyed a near monopoly status throughout much of the 20th century.
Now that the 21st century is well underway, IBM Is once again making waves, this time in the exciting world of cryptocurrency. Most recently, IBM made news when it used cryptocurrency to facilitate its cross-border payments, a move many other business titans are expected to emulate.
IBM Enters the Cryptocurrency Arena
This is IBM’s first foray into the world of cryptocurrency, but it may not be the last. This was a big move, so it was only fitting that it was unveiled at one of the world’s largest tech conferences. IBM revealed its move into the cryptocurrency market at Sibos 2017.
In making that announcement, IBM said it was partnering with Stellar, a blockchain startup. As a result of that partnership, Stellar successfully settled real-world transactions through the use of lumens, Stellar’s custom cryptocurrency.
Limited Use – At Least for Now
The use of Stellar’s lumens cryptocurrency is currently limited to cross-border payments made in Fijian dollars and British pounds, but the proof of concept indicates these payments could be expanded to many other currencies and a world of cross-border payment transactions.
The lumens platform may be in its early stages, but Stellar has already indicated that its payments are scalable by design. That scalability currently includes seven fiat currencies, including such heavy hitters as the Australian dollar and the New Zealand dollar.
The lumens platform has some characteristics that set it apart from its competitors, putting Stellar on firm footing for the future. The highlight of the technology is the use of public and private blockchain technologies in tandem. For now, the blockchain solutions IBM has implemented are designed to do the bulk of the work when transactions are cleared. At the same time, the actual settlement of those cross-border payments will be conducted using the Stellar blockchain.
In the case of IBM, lumens is used to connect the fiat currencies in question digitally. Through the use of Stellar’s services, IBM can enjoy nearly instantaneous exchanges. Notably, neither the buyer nor the seller needs to touch the cryptocurrency. That means buyers and sellers can connect with one another, even if they do not have a cryptocurrency account.
A Bridge Between Currencies
In essence, the lumens platform serves as a kind of bridge between multiple fiat currencies. This reduces the number of ledgers needed to maintain the cryptocurrency, significantly reducing the complexity of the system and making the entire process more transparent.
More Than Just Technology
It should also e noted that the partnership between Stellar and IBM goes far beyond the technical. This partnership represents a kind of out-of-the-box move for what has often been considered an old-line tech company. In making its move toward cryptocurrency, IBM is staking its claim in the 21st-century marketplace, and helping legitimize the lumens platform in the process.