Blockchain technology constitutes a "genuine revolution" in how decentralized systems are run, Commerzbank said in a March report.
Authored by global equities economist Peter Dixon, the report touches on both bitcoin as well as its underlying blockchain technology.
Exploring both the benefits and risks of the emerging technology, Dixon writes:
"From a systems perspective, the blockchain is a genuine revolution. In theory, therefore, it offers the possibility of eliminating many of the risks associated with the conventional ledger system."
Because one of the market's biggest risk factors – third parties – are removed due to the blockchain's decentralized nature, "there are no intermediaries to introduce credit and liquidity risk which are thus virtually eliminated", Dixon writes.
The report walks through the major aspects of bitcoin, including its distributed network of transaction verifiers, or miners. At the end, Dixon concludes that the question of bitcoin's future success remains unanswered.
"The extent to which bitcoin will displace other currencies is open to question," Dixon wrote. "Although it has become more widely accepted as a medium of exchange, its use as a store of value depends very heavily on its stability."
He later goes on to write that the limited supply of bitcoins, as well as the speculative nature of the bitcoin trading market, could hurt the digital currency in the long term – but that the underlying blockchain tech could still see usage.
"But the bitcoin debate has sparked a genuine revolution with the introduction of the blockchain," Dixon concludes, adding:
"In the years to come, even if bitcoin is relegated to a footnote in monetary history, blockchain technology is likely to still be with us, even if some of the claims currently made for it prove to be exaggerated."
The bank is one of more than 40 institutions involved in the R3CEV blockchain consortium.