Some also point to the potential for blockchain technology to simplify B2B payments, and resolve issues surrounding cross-border payments and other large-volume payments that are exclusive to the B2B environment.

"It is a breakthrough technology," Anthony Di Iorio, CEO and founder of the Toronto-based innovation hub Decentral and chief digital officer for the Toronto Stock Exchange, said. "It is a new kind of database that is revolutionizing the way people interact because it removes the necessity of trusting other people."

Di Iorio added, "Payments are instantaneous. You can transfer value anywhere around the world for free, and [blockchain technology] has removed intermediaries in payment systems and is bringing people together in a peer-to-peer fashion."

However, skeptics have said they think it is too early to gamble on blockchain technology transforming the financial system, since there are still worries tied to the volatility of bitcoin and everything connected to it.

In addition, they believe it is important to remove the bitcoin use case from blockchain technology. Bitcoin, released as open-source software in 2009, was the first currency associated with blockchain technology.

While blockchain technology enables the anonymous exchange of digital assets, such as bitcoin, it is not technically dependent on bitcoin.

The bank blockchain technology partnership, led by the New York City-based financial innovation company R3, includes Barclays, BBVA, Commonwealth Bank of Australia, Credit Suisse, J.P. Morgan, State Street, Royal Bank of Scotland and UBS. The goal of the initiative is for financial institutions to safely, securely store and share data in a consistent, effective ledger outside a firm's firewalls.

According to Reuters, the venture's initial focus will be on an underlying architecture. The group will collaborate on research, experimentation, design and engineering to help advance state-of-the-art, enterprise-scale shared ledger solutions to meet banking requirements for security, reliability, performance, scalability and audit requirements.

At this point, blockchain technology is still controversial, as it has left many wondering what effects will trickle down to community financial institutions, including credit unions.

Di Iorio said he does not think financial institutions should wait to dip their toes into the blockchain waters, however.

"Credit unions and community banks all have the opportunity to become leaders in this technology that is going to be groundbreaking for the industry," he said. "If they get on board with this, start learning it, and start being leaders in this, they can start instituting systems and maybe do it even quicker than some of the larger guys. They have the ability to be like startups and start driving this technology."

Hansen expressed hesitation, stating, "Major institutions are not really lining up behind bitcoin, but they are kicking the tires as to blockchain's merits, possibly in other financial models. However, some are also backing away, primarily starting in Australia."

She also explained credit unions do not have the discretionary funds to throw at high-risk ventures.

"Credit unions by their very charter are a cautious group, but this is also a reason for their success because they stay clear of potentially high risk environments," she said.

So what exactly should financial institutions be afraid of when it comes to blockchain technology?

Hansen explained some of the technology's cons are primarily related to bitcoin and include lack of governance and oversight, and currency price volatility, which some categorize as wild.

"There should be no fear, but there should be caution," Hansen noted. "We would advise that credit unions review the materials and white papers that we will produce for them, starting in the coming year."

There are also concerns related to fraud and cybercrime.

In a typical distributed denial of service extortion campaign executed via email, ransom demands involve bitcoin currency. This has led some to exercise caution toward bitcoin and blockchain technology.

"Fintech companies are starting to back away from bitcoin apps and offerings, but gravitating toward blockchain technology," Hansen said. "Bitcoin fees have become similar to the credit card; bitcoin transactions have become slower and more complex, and widespread user acceptance has been lacking to date."

Some of the technology's pros include its potential future value for non-currency reporting mechanisms, such as music, elections and stock transfers. In addition, some unintentional benefits may arise from the technology as its negative aspects are eradicated or reduced.

"Benefit is frequently spawned by failure, and some optimists call it the evolution of Big Data," Hansen suggested.

Di Iorio added blockchain technology has the ability to wipe out many manual and redundant processes that are currently expensive.

He even compared it to the advent of the Internet.

"When the Internet came about there was a breakthrough in communications, and now we are seeing value in the ability to transact using these technologies," he said. "That is going to create a major paradigm shift for finance and a disruption of traditional finance."

Blockchain technology could also enable the automation of numerous third-party services now performed by banks and brokerages, causing massive disintermediation.

Di Iorio explained removing the intermediaries will improve efficiency.

"We are going to see a lot of other business models and other things come out of this just like we've seen with the Internet," he said.

Di Iorio also said while blockchain technology development is under way, there is still a lot of prototyping, innovation and experimenting to be done.

For example, the London-based professional services firm PricewaterhouseCoopers recruited 15 leading technology specialists to explore the application and commercialization of blockchain technology as it is currently used for bitcoin.

PwC stated it decided to look into bitcoin and its underlying blockchain technology due to a growing demand for it from its clients and investors, as well as the belief it could significantly reduce costs and enhance traditional financial systems in various industries.

In a separate but related announcement, IBM said it is exploring the use of bitcoin's cryptocurrency shared ledger system in areas ranging from banking to the Internet of Things.

"It's a completely novel architecture for business – a foundation for building a new generation of transactional applications that establish trust and transparency while streamlining business processes," Arvind Krishna, senior vice president and director of IBM Research, wrote in a blog post last summer. "It has the potential to vastly reduce the cost and complexity of getting things done."

Krishna said blockchain-based systems could help radically improve entire industries, beginning with banking and insurance.

"But its impact could be much broader," Krishna added. "It could make a difference whenever valuable assets are transferred from one party to another and whenever you need to know for certain that a piece of digital information, anything from electronic artwork to the terms of a business agreement, is unique and unchangeable by any party without the agreement of all parties."