Settlement would not be instant - blocks would still need to be validated multiple times before that money would be cleared for a new transaction. So instead of

Settlement would not be instant - blocks would still need to be validated multiple times before that money would be cleared for a new transaction. So instead of the current system of "net" settlement where the net value of all inflows and outflows is reported to the banks 3 times a day, there would be constant individual settlement. Settling each transaction individually decreases the risk of double spend and counterparty risk (exponentially with each additional validation), but adds latency between every single transaction to the network. Instead of 3 "spikes" of latency throughout the day, you would have billions of miniscule "drops" of latency added onto the transactions. It also introduces a new fee structure - how do you decide validation priority when you have billions of transactions to process and check? In the bitcoin protocol, a fee is built into every transaction as a percentage of the transaction amount. The miner that verifies the transaction by performing the necessary proof of work gets to collect the fee. Thus the miner has an incentive to verify larger transactions before smaller ones. In an interbank clearing scenario there would be no explicit fees because the banks would be doing the validation themselves rather than using a distributed network of miners, but the banks would no doubt prioritize larger transfers first. This would make micropayments hard. I'm not sure how a blockchain would get around this, unless there were multiple different chains for different sized transactions?