(Bloomberg) -- Microsoft Corp. and other major technology companies and banks are forming an alliance to advance the adoption of Ethereum blockchain database technology in corporations, potentially offering better security for recording transactions, according to two people familiar with the plans.
The companies have been working on the Enterprise Ethereum Alliance for months, according to one of the people, and intend to launch the effort later in February, said another, who asked not to be identified because the plans haven’t been announced. Microsoft is one of the companies involved, one person said.
Ethereum is a new database technology similar to the blockchain that underpins the digital currency bitcoin. It’s essentially a shared, secured ledger of transactions, and its advantage is that it can’t be easily modified, so records can be trusted. It also allows for so-called smart contracts -- using code to govern processes such as how a hedge fund operates or how suppliers are paid. The feature could let companies automate some jobs and become more efficient.
Microsoft, based in Redmond, Washington, declined to comment.
The formation of the consortium is another sign that Ethereum -- one of dozens of versions of the database technology -- is gaining traction with corporate users. Many companies are already testing or deploying the blockchain in limited fashion internally for everything from interacting with suppliers to keeping track of samples. Ethereum, launched in 2015, still lacks many features that companies need to widely deploy it.
The consortium could speed up development of these features and make more companies comfortable with Ethereum. That, in turn, could push Ethereum ahead of other blockchains in popularity and use. The aim is to shape best practices and enterprise requirements related to handling transactions, as well as privacy and security.
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