3 ms·

It's because they don't fully trust each other, after all, in a single transaction you could be talking hundreds of millions, or billions of dollars changing ha

It's because they don't fully trust each other, after all, in a single transaction you could be talking hundreds of millions, or billions of dollars changing hands. With a blockchain, the transaction is virtually impossible to fake, and it's verified without involving costly middlemen and large delays - which is the situation today. The link I posted from Santander above contains more details as to the motivation behind it.

Canada 10y ago
See, this is what I don't understand. They don't have to trust each other to use traditional consensus protocols. What does it mean to fake a transaction? What does it mean to verify a transaction? With Bitcoin it's possible to do because the balances are public. But once you start making transactions private that deal not in value that exists on chain, but are merely promises for some externally held value, then who can verify its legitimacy?
- nickonline 10y ago
  It's the difference between double entry bookkeeping and single entry bookkeeping. By providing a common ledger that can be used when you desire single entry bookkeeping you don't necessarily need all the backchecking as you're using a smart contract to ensure upfront that when the money is settled the assets move.
- nickonline 10y ago
  Additionally if by 'traditional consensus protocols' you mean proof of work, you do realise it currently uses more power than Ireland to perform ~100MM transactions a day and that number is only going to incrase
  - kybernetikos 10y ago
    'Traditional consensus protocols' probably refers to Raft and Paxos rather than proof of work.
daneyh 10y ago
I don't think what you're saying here is correct. 'fake' transaction problem between counterparties aren't an issue and as I replied to your comment on the 1-5day settlement period in the GS r3 thread >> It takes some financial assets 3-5 days to settle That 1-5 days to settle isn't due to slow and disconnected systems though, which is what many looking from a tech perspective believe. Most financial transactions are matched in settlement systems the same day they are traded. The 3-5 days is for prefunding of underlying accounts, tear ups and other asset class idiosyncratic reasons.

Canada 10y ago

See, this is what I don't understand. They don't have to trust each other to use traditional consensus protocols. What does it mean to fake a transaction? What does it mean to verify a transaction? With Bitcoin it's possible to do because the balances are public. But once you start making transactions private that deal not in value that exists on chain, but are merely promises for some externally held value, then who can verify its legitimacy?

nickonline 10y ago
It's the difference between double entry bookkeeping and single entry bookkeeping. By providing a common ledger that can be used when you desire single entry bookkeeping you don't necessarily need all the backchecking as you're using a smart contract to ensure upfront that when the money is settled the assets move.
nickonline 10y ago
Additionally if by 'traditional consensus protocols' you mean proof of work, you do realise it currently uses more power than Ireland to perform ~100MM transactions a day and that number is only going to incrase
- kybernetikos 10y ago
  'Traditional consensus protocols' probably refers to Raft and Paxos rather than proof of work.

daneyh 10y ago

I don't think what you're saying here is correct. 'fake' transaction problem between counterparties aren't an issue and as I replied to your comment on the 1-5day settlement period in the GS r3 thread >> It takes some financial assets 3-5 days to settle That 1-5 days to settle isn't due to slow and disconnected systems though, which is what many looking from a tech perspective believe. Most financial transactions are matched in settlement systems the same day they are traded. The 3-5 days is for prefunding of underlying accounts, tear ups and other asset class idiosyncratic reasons.