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A small San Francisco startup is about to play a central role in unlocking the true Bitcoin value.
You see, while many assume the sole value of Bitcoin is in its role as a digital currency, that definition fails to recognize a game-changing technological enhancement that Bitcoin offers…
I'm talking about the blockchain, which is the digital public ledger that records and verifies every Bitcoin transaction. The company, called simply Chain, will serve other Bitcoin companies by simplifying their access to the blockchain.
This is a big deal because it opens the door to what's being called "Bitcoin 2.0" – the next phase of Bitcoin development that will only marginally involve its role as a currency.
What many people don't yet realize is that the blockchain has the potential to be much more than merely a ledger because it can be used in non-financial ways, and supplemental data can be embedded in the transactions.
So far people have come up with a range of disruptive ideas. For one thing, the blockchain can be used to store and transfer ownership data.
When venture capital firm Ledra Capital put the question to Twitter in May, people came back with a long list of suggestions, including decentralized stock exchanges where securities could be traded peer to peer, mortgages, "smart" contracts that could fulfill their function without outside intervention, voting, trademarks, proof of authorship, and more.
The list of ideas is literally growing by the day, and a lot of entrepreneurs are starting companies to capitalize on those ideas.
This is where Chain comes in…
How Chain Will Unlock Bitcoin Value
Any software that's designed to use the blockchain for an alternative purpose will require the creation and maintenance of "nodes" on the Bitcoin network. These nodes are the autonomous computers that process the transactions.
Chain is offering to perform this function for any company that needs it and would rather not be bothered with the hassle of doing it internally. It's not unlike the "software-as-a-service" (SaaS) that tech companies offered by giants like Cisco Systems, Inc. (NYSE: CSCO), IBM Corp. (NYSE: IBM), and Oracle Corp. (NYSE: ORCL).
Here's how Chain founder and Chief Executive Officer Adam Ludwin describes what his company does: