Visa, Capital One, JP Morgan.

While it may be expected that the world’s leading financial firms would be interested in bitcoin and blockchain tech given its association with currency, the technology’s range of potential use cases is attracting perhaps more surprising names.

For example, Verizon Ventures, the venture capital arm of US telecommunications giant Verizon, recently invested in Filament, a Nevada-based startup seeking to use the bitcoin blockchain and Ethereum to enable Internet of Things (IoT) devices to both be tracked, and to transact, on a public ledger system.

The investment was Verizon Ventures’ first in the industry, but according to director Ed Ruth, it’s unlikely it will be the last. Ruth believes blockchain tech has the ability to solve problems facing technology applications in the IoT and beyond.

In an interview, Ruth indicated Verizon Ventures had been studying bitcoin for a year without much interest, but it was the larger implications of the blockchain, the digital currency’s distributed ledger, that changed his mind about the available opportunities.

Ruth told CoinDesk:

“As we started looking at the protocol, it became apparent that blockchain had a bigger potential than the specific bitcoin or cryptocurrency use case. We started to see some convergence around Internet of Things, and we started to seek out companies leveraging the technology.”

While he suggested the use of cryptographic tokens as digital currency might find a fit in the third world, Ruth suggested the firm doesn’t believe this use case is as compelling in developed markets like the US.

Still, Ruth cautioned that his firm doesn’t have an operating thesis on the technology, calling it a “living and breathing” project, adding that Verizon is paying attention to all aspects of the developing technology.

“I think the market is incredibly nascent,” he continued, “but we’re interested and paying attention and we’re learning through companies we’re investing in.”

One of the largest cell phone carriers in the US, Verizon generated $87.6bn in wireless revenues in 2014, and boasts 6.6 million Internet subscribers.

All in on IoT

Ruth explained that, while Verizon Ventures is interested in blockchain tech, it’s still a very general interest. As such, it was Filament’s use of the technology for IoT, he said, that made the startup a compelling investment.

“We think of IoT as an extended new vertical for network infrastructure. We know it’s going to be the backbone for a lot of the data that needs to transact in the cloud for smart cities, fleet management, and so on and so forth,” he explained.

Filament, he recently wrote, stood out for the way it combined IoT technology with its use of end-to-end encryption and ability to “securely collect and consolidate data” with its devices. The startup is set to release two devices in Q4 of this year, both of which advertise an ability to securely communicate, execute smart contracts and send microtransactions.

Ruth said IoT has become a bigger point of emphasis for Verizon as it has recently sought to expand beyond telecommunications. For example, he noted Verizon’s recent acquisition of AOL saw it entering the media business.

“We’ve been traditionally a telco company and about a year and a half two years ago, we transitioned into a technology company,” he continued. “I think IoT is a means by which we can transform ourselves.”

Cautious approach

Despite a heavy focus on IoT, Ruth said he does believe blockchain tech will impact other verticals, though he’s not sure exactly which will be affected.

For example, he suggested there may be use cases for digital currency in financial services and shared databases in regards to roaming agreements, where Verizon will extend voice and data services to customers by way of a local telecom partner.

While Orange Telecom has honed in on the former use case for extending financial services, Ruth said the model doesn’t quite make sense for Verizon yet given its US focus.

“For emerging markets, it’s a bigger value than in stable markets with stable currencies,” Ruth continued. “Our initial thinking was that it didn’t solve a large enough problem domestically.”

Going forward, Ruth predicts bitcoin and blockchain tech will continue to garner attention from major brands, given the support and capital leading VC firms such as Andreessen Horowitz have already extended.

Still, he said incumbent companies are likely to be cautious as they explore the tech, concluding:

“I think a lot of companies have been looking at bitcoin and blockchain for at least as long as we have. But, when you’re a big company and you’re publicly traded, it takes you a little bit longer to make those choices.”

Verizon image via Shutterstock