BTCC, one of the very first Bitcoin exchanges in China, recently doused the growing interest of banks to adopt the blockchain technology integrated with the digital currency system. While China is slowly easing up its regulations regarding digital cryptocurrencies, tech and financial experts agree that blockchain has no significant application in financial institutions.

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Kapronasia founder Zennon Kapron recently said in a statement, "You see these banks that really get excited about blockchain and fintech. At some point over the next year, banks are going to wake up and realize that blockchain is a great sexy technology for a problem that doesn't exist."

Kapron founded BTCC with Bobby Lee.

The blockchain technology has a lot of potential applications for financial institutions. The technology can increase security, speed up transaction times, minimize instances of fraudulent transactions, and provide transparency. Moreover, the technology is relatively cheap to set up compared to other security protocols that are currently used by many banks.

However, Lee said that for banks to fully adopt the blockchain technology, there must be a "very good blockchain that is immutable, global, open source, [and] public." Currently, only one ledger is available to the public, and that is the Bitcoin blockchain.

The blockchain is a distributed and decentralized system of record keeping in which information is stored on computers that are also part of the bigger public network. This type of distributed and decentralized system is what keeps malicious users from rewriting or changing data that is on the public ledger.

Lee and Kapron agree that banks trying to create their own private blockchains to securing their data defeats the whole purpose of a public blockchain. Moreover, unlike the public blockchain, which is maintained by thousands - if not millions - of users, a private blockchain that is maintained only by a handful of banks may not ensure the total security of its system.

Tagsbitcoin, Blockchain, Bitcoin blockchain, public ledger, Cryptocurrency