May 11, 2015 · 1 minute

Bitcoin has an image problem. The currency has been plagued by controversy almost since its debut, whether it stems from Bitcoin's use on illegal markets or the hundreds of millions of dollars that disappeared with a popular exchange.

But that doesn't mean bitcoin and its underlying technology, the blockchain -- a method of storing data that makes it easy to track information without having to trust whomever is providing it -- is a lost cause. Nasdaq wants to prove that by using blockchain technology, first in its Private Market platform and, if all goes well, later in its stock marketplace.

If all that sounds like a bunch of tech jargon, Here's how Business Insider explains the basic mechanisms behind the blockchain:

[M]embers of the network collectively contribute processing power from their computers to maintain bitcoin's integrity. And every time a transaction is made, a record of it is sent out to be recorded immutably in a public ledger. This ledger is the blockchain.

It allows bitcoin users to cut out the middleman — one user can send another a sum of money, anywhere in the world, without having to rely on a financial institution. The transactions are effectively set in stone, with records distributed permanently across the entire network. Nasdaq wants to use the blockchain to help make it easier to verify transactions, speed up the trading process, and be more reliable than other trading tools. Instead of having a legal team fill out spreadsheets, which is how many trades are conducted now, the blockchain will be able to keep track of all relevant data.

CoinDesk notes that Nasdaq isn't the first company to see the blockchain's potential. Various investment banks, venture capitalists, and data-focused workers in the financial industry all have high hopes for the technology. This isn't a bunch of paranoid loons advocating for a cryptocurrency like Bitcoin; it's some of the smartest people in finance extolling the virtues of a new technology.

Nasdaq's first use of blockchain tech will "provide a fully-electronic, distributed ledger-style solution for accurate record-keeping" to complement the service, ExactEquity, that "enables private companies to manage their capitalization table and stock plans more efficiently." The tool will arrive "later this year."

[illustration by Brad Jonas]