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Financial companies and banks already trust each other. It doesn't make sense for them to be held under public scrutiny with a public ledger. Therefore, blockch

Financial companies and banks already trust each other. It doesn't make sense for them to be held under public scrutiny with a public ledger. Therefore, blockchain is a solution without a problem for financial institutions. Their needs are already well met and there's little incentive to change. It worked for a 1000+ years why uproot everything for a buzzword ? Of course they aren't going to change.

alblue 10y ago
Actually modern finance has its roots in the coffee houses of London, circa 1650. http://www.history.co.uk/study-topics/history-of-london/londons-coffee-houses http://www.history.co.uk/study-topics/history-of-london/lond... These were the meeting places in which the maritime insurance deals were made at a time of increasing maritime exploration by the British. These also evolved to be the places such materials were bought and sold - and in fact the trading pits were (and in some cases are) based on these gathering locations. It's interesting to visit the London Metal Exchange which although computerised has the trader pit (complete with circular sofa) in which trades are still conducted between traders. In an interesting turn of fate the very docks that the traders made possible subsequently collapsed with the introduction of container shipping and ships which were too large to navigate the Thames, and pushed shipping ports to the periphery of the country. In an ironic twist of fate these docks then became the Docklands and home to London's financial district. Right up until Brexit, when the financial centre was destroyed by petty minded little England, ending four hundred years of global outlook for the sake of believing in lies.
- B1FF_PSUVM 10y ago
  > when the financial centre was destroyed by petty minded little England Perhaps if the 'financial centre' were not so ... self-centered ...
- wtbob 10y ago
  Nice comment, right up until your final sentence, which just drips with bitterness.
  - mst 10y ago
    If we do end up picking a path to brexit that fucks over the London financial sector, in hindsight his comment will probably look like merely an impassioned statement of fact. I'm moderately hopeful than we won't, but, well, 2016 has been 2016 and I have a horrible feeling 2017 is going to go "Hey, 2016, hold my beer and watch this!"
- century19 10y ago
  I'm not sure accurate this is. Paper money and the first stock exchange came from Amsterdam. A lot of the words, like Bank (board where the money was counted, breaking the bank meant breaking the board), nostro Account, vostro Account came from Latin/Italian.
patrickk 10y ago
> Their needs are already well met and there's little incentive to change. This is definitely not true. It takes some financial assets 3-5 days to settle after the initial transaction goes through, weaving its way through many database systems (some many decades old) and middlemen who each take a cut, e.g. clearing houses. Any established industry has lots of cruft that builds up. For this reason Santander estimates that banks can save $15-20bn per year collectively by using blockchain technologies to make their infrastructure more efficient[1][2] [1] http://www.coindesk.com/santander-blockchain-tech-can-save-banks-20-billion-a-year/ http://www.coindesk.com/santander-blockchain-tech-can-save-b... [2] http://santanderinnoventures.com/fintech2/ http://santanderinnoventures.com/fintech2/
- kelnage 10y ago
  I agree that the current systems are very far from optimised. But what benefit does the blockchain per se give them, given they already trust all participants? It only seems to introduce unnecessary costs, such as mining, when compared to the alternatives.
  - patrickk 10y ago
    > It only seems to introduce unnecessary costs, such as mining Who says you need mining? There's different ways to achieve blockchain consensus, such as proof of stake or proof of existence, you don't need proof of work like Bitcoin uses. Since with a private banking settlement blockchain you know in advance who the players are (individually-invited banks) you can give them a percentage of the network and have each node verify the transactions across the network. You could even give nodes to regulators or consumer advocacy groups to achieve regulatory compliance or consumer oversight if required. As for cost, you could technically run a PoS node with a raspberry pi, a large USB drive, a wifi connection, powered by a solar panel and an old car battery on the roof of a building. Proof of stake only needs minimal computing power and a persistent internet connection. Seriously, a lot of the scorn heaped on blockchain technology is unwarranted. Yes, there's loads of hype and bullshit (we're going to get rid of nation states and fiat currency!!!1!), but no more than the internet in 1994 or during the dotcom boom. Yes, lots of crap ideas, but some gems too. It's too early to see what real impact it will have. Criticising current blockchain technology is like criticising early broadband or smartphones.
lucozade 10y ago
> Financial companies and banks already trust each other They most definitely do not, 2008 took care of that. > It doesn't make sense for them to be held under public scrutiny That's a matter of debate. The banks are held to, more or less, realtime scrutiny by the regulators on behalf of the public. Actually making transactions truly public would have tricky client confidentiality issues. That's why the focus has been on settlement and clearing as that's potentially more tractable. > Therefore, blockchain is a solution without a problem for financial institutions Possibly. The idea of a single version of the truth is very appealing to banks as a huge amount of time and effort is expended on reconciling trades, settlements etc. Whether a global transaction ordering has a use is debatable. Things like proof of work even less so. Bear in mind, as others have said, you can take some of the features that have been applied to blockchains and use them separately. It's not a one size fits all. However, if you take away enough stuff then you often find that other technologies could be more appropriate. > Their needs are already well met and there's little incentive to change Not at all. No-one's really happy with the status quo. The regulators want to be sure that the banks are well risk managed. Even further, they want semi-continuous proof that it's so. The banks need to satisfy the regulators and still make money. The banks are a long way from that today. > why uproot everything for a buzzword They may well not but you underestimate the ability of senior folk in big organisations to get distracted by the shiny, shiny. Banks are no exception, they are just as susceptible to fads as anyone. On the positive side, they are surprisingly good at accepting experimental technology. They've been early adopters of relational DBs, XML, Java, Smalltalk, Haskell, OCaml, object DBs, FPGAs etc etc. Of course, they're also one of the biggest users of COBOL so it's swings and roundabouts.

alblue 10y ago

Actually modern finance has its roots in the coffee houses of London, circa 1650. http://www.history.co.uk/study-topics/history-of-london/londons-coffee-houses http://www.history.co.uk/study-topics/history-of-london/lond... These were the meeting places in which the maritime insurance deals were made at a time of increasing maritime exploration by the British. These also evolved to be the places such materials were bought and sold - and in fact the trading pits were (and in some cases are) based on these gathering locations. It's interesting to visit the London Metal Exchange which although computerised has the trader pit (complete with circular sofa) in which trades are still conducted between traders. In an interesting turn of fate the very docks that the traders made possible subsequently collapsed with the introduction of container shipping and ships which were too large to navigate the Thames, and pushed shipping ports to the periphery of the country. In an ironic twist of fate these docks then became the Docklands and home to London's financial district. Right up until Brexit, when the financial centre was destroyed by petty minded little England, ending four hundred years of global outlook for the sake of believing in lies.

B1FF_PSUVM 10y ago
> when the financial centre was destroyed by petty minded little England Perhaps if the 'financial centre' were not so ... self-centered ...
wtbob 10y ago
Nice comment, right up until your final sentence, which just drips with bitterness.
- mst 10y ago
  If we do end up picking a path to brexit that fucks over the London financial sector, in hindsight his comment will probably look like merely an impassioned statement of fact. I'm moderately hopeful than we won't, but, well, 2016 has been 2016 and I have a horrible feeling 2017 is going to go "Hey, 2016, hold my beer and watch this!"
century19 10y ago
I'm not sure accurate this is. Paper money and the first stock exchange came from Amsterdam. A lot of the words, like Bank (board where the money was counted, breaking the bank meant breaking the board), nostro Account, vostro Account came from Latin/Italian.

patrickk 10y ago

> Their needs are already well met and there's little incentive to change. This is definitely not true. It takes some financial assets 3-5 days to settle after the initial transaction goes through, weaving its way through many database systems (some many decades old) and middlemen who each take a cut, e.g. clearing houses. Any established industry has lots of cruft that builds up. For this reason Santander estimates that banks can save $15-20bn per year collectively by using blockchain technologies to make their infrastructure more efficient[1][2] [1] http://www.coindesk.com/santander-blockchain-tech-can-save-banks-20-billion-a-year/ http://www.coindesk.com/santander-blockchain-tech-can-save-b... [2] http://santanderinnoventures.com/fintech2/ http://santanderinnoventures.com/fintech2/

kelnage 10y ago
I agree that the current systems are very far from optimised. But what benefit does the blockchain per se give them, given they already trust all participants? It only seems to introduce unnecessary costs, such as mining, when compared to the alternatives.
- patrickk 10y ago
  > It only seems to introduce unnecessary costs, such as mining Who says you need mining? There's different ways to achieve blockchain consensus, such as proof of stake or proof of existence, you don't need proof of work like Bitcoin uses. Since with a private banking settlement blockchain you know in advance who the players are (individually-invited banks) you can give them a percentage of the network and have each node verify the transactions across the network. You could even give nodes to regulators or consumer advocacy groups to achieve regulatory compliance or consumer oversight if required. As for cost, you could technically run a PoS node with a raspberry pi, a large USB drive, a wifi connection, powered by a solar panel and an old car battery on the roof of a building. Proof of stake only needs minimal computing power and a persistent internet connection. Seriously, a lot of the scorn heaped on blockchain technology is unwarranted. Yes, there's loads of hype and bullshit (we're going to get rid of nation states and fiat currency!!!1!), but no more than the internet in 1994 or during the dotcom boom. Yes, lots of crap ideas, but some gems too. It's too early to see what real impact it will have. Criticising current blockchain technology is like criticising early broadband or smartphones.

lucozade 10y ago

> Financial companies and banks already trust each other They most definitely do not, 2008 took care of that. > It doesn't make sense for them to be held under public scrutiny That's a matter of debate. The banks are held to, more or less, realtime scrutiny by the regulators on behalf of the public. Actually making transactions truly public would have tricky client confidentiality issues. That's why the focus has been on settlement and clearing as that's potentially more tractable. > Therefore, blockchain is a solution without a problem for financial institutions Possibly. The idea of a single version of the truth is very appealing to banks as a huge amount of time and effort is expended on reconciling trades, settlements etc. Whether a global transaction ordering has a use is debatable. Things like proof of work even less so. Bear in mind, as others have said, you can take some of the features that have been applied to blockchains and use them separately. It's not a one size fits all. However, if you take away enough stuff then you often find that other technologies could be more appropriate. > Their needs are already well met and there's little incentive to change Not at all. No-one's really happy with the status quo. The regulators want to be sure that the banks are well risk managed. Even further, they want semi-continuous proof that it's so. The banks need to satisfy the regulators and still make money. The banks are a long way from that today. > why uproot everything for a buzzword They may well not but you underestimate the ability of senior folk in big organisations to get distracted by the shiny, shiny. Banks are no exception, they are just as susceptible to fads as anyone. On the positive side, they are surprisingly good at accepting experimental technology. They've been early adopters of relational DBs, XML, Java, Smalltalk, Haskell, OCaml, object DBs, FPGAs etc etc. Of course, they're also one of the biggest users of COBOL so it's swings and roundabouts.