For nearly four years, I have been deeply involved in our exploration of Bitcoin and blockchain technology at Fidelity Investments. Our interest began in 2014, and has grown into a dedicated team that is researching and experimenting across different parts of our business.

Our journey is an exciting one. It has been difficult at times for me, but I have grown through the people I’ve met and the discoveries we have uncovered along the way. It can be daunting for me or any member of our team to take on a new challenge that is uniquely complex, specifically in an area that remains largely misunderstood. We used a three-step approach that I will explain in some detail for anyone who is looking for a way to get started exploring blockchains in their own organization. First, a bit more about how we developed this work.

Four Years of Research

In 2014, a group of senior leaders at Fidelity were exploring several emerging scenarios in financial services. The concept of frictionless capital markets was particularly intriguing, and we began exploring it with our external collaboration partners.

The idea that the involvement of financial intermediaries could decrease, or even become eliminated, over time was a compelling emerging theme for us. At that point, the group did not seek to make predictions, but saw enough potential to seek more information.

By this time, much had been published in academic and other circles about Bitcoin and its underlying technology, the blockchain. However, in large financial institutions and throughout our industry, little was being discussed publicly around this technology and its potential to change the way we create, store and transfer value.

I was invited to lead our effort in Fidelity Labs to explore these innovations that allowed for the digital movement of value without any central authority. Much of what we looked at early on evoked parallels to the earliest days of the Internet, where an open protocol enabled unlimited potential for the exchange of information and ideas.

As this research progressed, we established the Fidelity Blockchain Incubator in 2015, creating a dedicated team to experiment with blockchain technologies and a number of digital currencies, such as bitcoin, ether and Litecoin.

Early Exploration

I am often asked how we got started. The tech was very new and was not easily understood. Many in our industry were skeptical and the earliest proponents were spread out around the globe.

I like to think of myself as an enthusiastic student of nascent ideas, yet I was a bit of a skeptic myself. I had heard some of the early negative buzz, hadn’t we all? Many said bitcoin was primarily going to be used for nefarious purposes and stories of ransom demands and elicit marketplaces dominated the early news coverage.

Despite the negative attention, people I spoke with were still very passionate about Bitcoin’s potential. It was undoubtedly worth exploring more and we saw enough interest to dive in.

Some of the questions that I sought to answer included:

How is Bitcoin valued?

What impact would blockchains and these new digital assets have on the finance industry?

Would this all impact money as we know it?

What about the impact on other industries and businesses?

Could every intermediary essentially be replaced by a Bitcoin-like platform or protocol?

As I explored each of these questions, my eyes were opened and I couldn’t read enough or talk with enough people.

My team helped create Fidelity’s Bits and Blocks Club in June 2015 as an internal learning program open to all Fidelity Investments employees. We encouraged everyone here to learn more about this new technology and how it might impact Fidelity’s customers and clients. Through the club, we host speakers with a range of opinions and ideas and broadcast these events to everyone at Fidelity. This group gets hands on, right alongside my team, which has helped spark new ideas in different parts of the firm, while my team was able to remain focused on creating our initial proof of concepts and executing specific pilots.

Now that we had more people from around the company thinking about this and the dedicated team building specific pilots, it was time to deploy a proven three-step method we’ve used at Fidelity Labs when exploring emerging technologies: