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SWIFT is essentially a messaging system, the funds still have to clear elsewhere. Blockchain solutions (ripple being the biggest crypto for interbank funds exch

SWIFT is essentially a messaging system, the funds still have to clear elsewhere. Blockchain solutions (ripple being the biggest crypto for interbank funds exchange atm) combine these 2 systems basically. With so many moving parts involved with proprietary not immediately visible logging mechanisms - the banks play it safe especially when it comes to international transactions spanning multiple jurisdictions etc.

nadaviv 10y ago
As long as the blockchain-based currency doesn't have a legal tender status, won't banks have to clear elsewhere anyway? The way I see it, unless the central bank joins the party and declares records on the blockchain as the final word over ownership and that the blockchain currency must be accepted as legal tender, the blockchain records are just that - historical records to keep track of who-owes-who-what, with settlement happening elsewhere and enforced via contracts, lawyers and court. The point being, blockchain makes sense for bearer assets like Bitcoin, where owning the key is owning the asset and there are no other external processes that can effect ownership (moving around trucks with cash, court disputes, etc). What banks really need, in my opinion, is simply a cryptographically-signed append-only log where they record debt among each other. No global consensus, shared state or blockchain is needed here - just a private log for each pair of banks that transact with each other, kept locally for the interested parties only, and which can be used in court if either party misbehaves and does not settle the payment.
- Canada 10y ago
  I never get an answer to this basic question. There seems to be all this money thrown into the (not bitcoin) blockchain, but nobody is ever willing to explain in detail why that is.
Canada 10y ago
Yes I keep hearing this, but can you tell me why? What are the moving parts now, and how exactly will a blockchain make them go away, given that any blockchain a bank would use won't directly represent the assets the bank claims to have? How can it ever be different from an authenticated messaging system? I'd be very interested to read a detailed, technical explanation.
- ChemicalWarfare 10y ago
  Check out Ripple docs. That's just one angle of looking at the situation (using a non-100%-privately-controlled-system) but it should clarify a few basic things.
  - Canada 10y ago
    I've looked at the Ripple site. Can you explain why a blockchain is such a big deal over traditional consensus algorithms?
    - ChemicalWarfare 10y ago
      Not sure what " traditional consensus algorithms" you're referring to. Using a trusted 3rd party entity to keep everyone honest?

nadaviv 10y ago

As long as the blockchain-based currency doesn't have a legal tender status, won't banks have to clear elsewhere anyway? The way I see it, unless the central bank joins the party and declares records on the blockchain as the final word over ownership and that the blockchain currency must be accepted as legal tender, the blockchain records are just that - historical records to keep track of who-owes-who-what, with settlement happening elsewhere and enforced via contracts, lawyers and court. The point being, blockchain makes sense for bearer assets like Bitcoin, where owning the key is owning the asset and there are no other external processes that can effect ownership (moving around trucks with cash, court disputes, etc). What banks really need, in my opinion, is simply a cryptographically-signed append-only log where they record debt among each other. No global consensus, shared state or blockchain is needed here - just a private log for each pair of banks that transact with each other, kept locally for the interested parties only, and which can be used in court if either party misbehaves and does not settle the payment.

Canada 10y ago
I never get an answer to this basic question. There seems to be all this money thrown into the (not bitcoin) blockchain, but nobody is ever willing to explain in detail why that is.

Canada 10y ago

Yes I keep hearing this, but can you tell me why? What are the moving parts now, and how exactly will a blockchain make them go away, given that any blockchain a bank would use won't directly represent the assets the bank claims to have? How can it ever be different from an authenticated messaging system? I'd be very interested to read a detailed, technical explanation.

ChemicalWarfare 10y ago
Check out Ripple docs. That's just one angle of looking at the situation (using a non-100%-privately-controlled-system) but it should clarify a few basic things.
- Canada 10y ago
  I've looked at the Ripple site. Can you explain why a blockchain is such a big deal over traditional consensus algorithms?
  - ChemicalWarfare 10y ago
    Not sure what " traditional consensus algorithms" you're referring to. Using a trusted 3rd party entity to keep everyone honest?