Microsoft announces Azure blockchain partnership

Microsoft has thrown its hat in the blockchain ring, partnering with R3 CEV to offer banks the ability to work with the technology behind the Bitcoin cryptocurrency on the Azure cloud platform.

Bitcoin shot to fame as a something-from-nothing story when the value of the cryptocurrency, created as users spend computational power to 'mine' the coins by generating hashes and verifying transactions on the underlying blockchain, went from fractions of a cent to hundreds of dollars. Bitcoin itself remains volatile, however, and companies are increasingly looking to the underlying blockchain technology rather than the Bitcoin implementation itself as having the most value - using it for everything from electronic signatures on documents to creating novel cryptocurrencies of their own.

The blockchain market its proponents claim is due to explode, and it's no surprise then to find Microsoft dipping its toes in the water with a partnership that will see R3 CEV, a consortium of major banks, using Microsoft's Azure cloud platform to deploy blockchain technologies.

'Known by many as the backbone of Bitcoin, blockchain offers a secure and transparent way to digitally track the ownership of assets. Simply put, it promises to revolutionise the way financial institutions conduct transactions,' crowed Microsoft's Peggy Johnson of the deal. 'Blockchain modernises legacy financial processes, so trades of assets like stocks and bonds can be finalized in minutes, not days. And by enabling a more direct transfer of ownership, it eliminates the need for middlemen like clearing houses, both cutting costs and greatly reducing the risk of fraud.'

The partnership with R3 CEV comes as confidence in Bitcoin itself takes a dip, with Microsoft dropping support for Bitcoin payments on the Microsoft Store just over a year after introducing the capability via Bitpay.