10 ms·

Blockchain could save investment banks up to $12B a year: Accenture

95 points by artsandsci 10y ago

mholmes680 10y ago
"Their estimates did not include potential costs and investments required to deploy the technology." well, of course not... because then there would be no dramatic teaser headline. Accenture money grab here - presumably they've positioned themselves accordingly already?
- saemil 10y ago
  I agree with your sentiment. I do not see a scenario where financial institutions would agree to put their transactions into a distributed ledger with copies of the data (even encrypted) held by their competitors. If the financial institutions limit the ledger to computers within their control, what would be the benefit over a clustered database environment (I am assuming that most large financial institutions already have these).
  - chejazi 10y ago
    > what would be the benefit over a clustered database With a blockchain, the database and the revision history would be part of the same artifact. Not sure how advantageous this is, however.
  - cashmonkey85 10y ago
    The problem is without blockchain you don't have a meaningless buzzword to sell bullsh*t to banks. Blockchain is a vital technology for this. Cryptocurrency is the future but I've never talked to more snake oil sales people than when talking to "blockchain" companies. I marvel at people's ability to sell nothingness
    - J-dawg 10y ago
      I don't know much about blockchain, but the salespeople of big consultancy firms like Accenture are master snake oil merchants. When you combine the two it must be like a perfect storm of bullshit.
      - throwawayish 10y ago
        Like a shit tornado. Shirnado.
    - ng12 10y ago
      I worked in a consulting-type company for a bit and the most valuable lesson was that, generally speaking, nobody knows anything about anything. The most valuable institutions in the world have completely clueless people managing their tech and the ignorance only gets worse as you go up the chain. It all boils down to "nobody got fired for buying IBM". Your blockchain initiative is only to get you noticed enough to get promoted or hired to a better position somewhere else. By the time anybody realizes how worthless it was you're long gone.
      - cmollis 10y ago
        "nobody knows anything about anything". Actually, somebody knows, but they work for someone else.
- bduerst 10y ago
  They also cite "run some processes, like finance reporting". How would storing this data in a blockchain have less overhead than an http server? Or even a torrent? It seems like a hammer looking for a nail.
  - bdamm 10y ago
    The discussion was around trustworthy data, so I think they want proof that a page served up and stored was in fact the actual page served up and stored, for later audit. HTTP doesn't give you that. Bittorrent doesn't give you that. But blockchain can, if you pay a fractional coin to store the hash of the page in the chain forever. With a reference to the page and to the transaction, you can then later determine whether the page is intact or has been modified. And for bonus points a signature could be stored as well.
    - bduerst 10y ago
      This is just passing the overhead cost to whomever is mining the network though. The trustworthiness of a blockchain comes from it's ability to repel attacks with computing power, with more power meaning more trustiness. This means tremendous overhead for a blockchain that could just as easily be performed with the centralized system we have now.
- mcintyre1994 10y ago
  Banks spending billions on complex technical processes could save billions if they replace those systems with a new system and you ignore all costs associated with implementing and running that system. Well yes, but..
otoburb 10y ago
Accenture is trying to augment their Financial Services[1] practice arm with blockchain capabilities and expertise. [1] https://www.accenture.com/us-en/service-blockchain-financial-services https://www.accenture.com/us-en/service-blockchain-financial...
godzillabrennus 10y ago
Blockchain is so badly needed in the startup world when allocating shares of a company. Eshares is promising but too pricey for bootstrapping entrepreneurs. An open standard with distributed tracking of shares allocated for any given company would help institute much more trust into startup investing. Right now it's kind of tough to do due dilligence on a small private company.
- amluto 10y ago
  > Blockchain is so badly needed in the startup world when allocating shares of a company. Eshares is promising but too pricey for bootstrapping entrepreneurs. What, exactly, does a blockchain have to do with this? ISTM all that's needed is a spreadsheet with an audit log, and even the audit log is somewhat optional.
  - riprowan 10y ago
    In theory, an open blockchain like Bitcoin eliminates the need for a trusted authority to be the system of record. A spreadsheet needs someone to manage it. That person, and that data, must be very trustworthy, else they can simply change the data for their benefit. The compliance procedures that assure trustworthiness cost money. Lots of money. And they still fail. Blockchains, in theory, could also serve as a voting mechanism on splits, which could be manifested as blockchain hardforks. As Satoshi Nakamoto wrote: > The proof-of-work also solves the problem of determining representation in majority decision making. If the majority were based on one-IP-address-one-vote, it could be subverted by anyone able to allocate many IPs. Proof-of-work is essentially one-CPU-one-vote. The majority decision is represented by the longest chain, which has the greatest proof-of-work effort invested in it. Essentially a blockchain can codify the ownership of a stock share into a smart contract. That's the theory, and only insofar as it applies to a Proof of Work blockchain like Bitcoin. A private blockchain is more likely to be a Proof of Stake blockchain, in which shares (or tokens of other sorts) are issued in a "premine" which creates all of the tokens that will ever exist. These are then distributed to the initial group of trusted members of the private blockchain. From there, the blockchain can eliminate the need for a trusted authority to serve as the system of record of ownership.
wildchild 10y ago
Postgresql too.
- ecesena 10y ago
  I understand this was prob a sort of joke, but I'd be interested in a data point on how much a free db could help save. Is $12B reasonable, would it be much lower/higher?
  - di4na 10y ago
    free maybe. The real point being that it is one that works. A big part of the financial but also the entreprisey world in general have never left the 80s/90s. The idea of scale does not exist.
  - Alex3917 10y ago
    > I'd be interested in a data point on how much a free db could help save Database companies price their products by how much they think they can extract from your business. That's why they're mostly priced at free or some nominal cost for the first few years, and then several million dollars per year afterwards.
  - cashmonkey85 10y ago
    Without a doubt higher. If you pore snake oil on your database it always slows it down a little
geodel 10y ago
I am not clear if the money saved is after paying off Accenture consultants or before. If it is after it is too good to be true.
patio11 10y ago
Blockchain here refers not to the distributed database technology loosely coupled with Bitcoin but rather "assert the existence of a database; simultaneous adoption of it across all parties that matter in the financial industry sure would be swell now wouldn't it." Which is true. Databases are pretty useful things. It's a shame banks never thought of adopting one before.
- arjunnarayan 10y ago
  "Another aspect of blockchain, as I often emphasize, is sociological: Blockchains are cool. If you announce that you are updating the database software used by a consortium of banks to track derivatives trades, the New York Times will not write an article about it. If you say that you are blockchaining the blockchain software used by a blockchain of blockchains to blockchain blockchain blockchains, the New York Times will blockchain a blockchain about it." https://www.bloomberg.com/view/articles/2017-01-10/bank-blockchains-and-an-alibaba-box https://www.bloomberg.com/view/articles/2017-01-10/bank-bloc...
  - patio11 10y ago
    It's basically impossible for me to have any insight on the financial markets which has not already been said, better, by Matt Levine.
    - eternalban 10y ago
      He omitted to mention dark pools & how blockchains can help there. https://en.wikipedia.org/wiki/Dark_liquidity https://en.wikipedia.org/wiki/Dark_liquidity [p.s.] The "social" angle was the most ridiculous thing I've ever [read]. Yeah, let's pour in tons of money to build a tech so it gets printed in the New York Times. Is this guy for real?
  - bduerst 10y ago
    This is tangental, but his analysis of Uber seems to be spot on: >Eventually there will be self-driving cars, and there's no special reason to think that Uber will be the best at building them, or that its dominant position in the ride-hailing-app space will protect it from better self-driving-car businesses.
josu 10y ago
For context, Accenture has been criticizing blockchains for their immutability. [1] [2] [3] So I would not take anything coming from them seriously. [1] Downside of Bitcoin: A Ledger That Can’t Be Corrected: http://www.nytimes.com/2016/09/10/business/dealbook/downside-of-virtual-currencies-a-ledger-that-cant-be-corrected.html?_r=0 http://www.nytimes.com/2016/09/10/business/dealbook/downside... [2] EDITING THE UNEDITABLE BLOCKCHAIN (PDF) https://www.accenture.com/t20160927T033514__w__/us-en/_acnmedia/PDF-33/Accenture-Editing-Uneditable-Blockchain.pdf https://www.accenture.com/t20160927T033514__w__/us-en/_acnme... [3] Accenture Launches A Way To Edit Blockchains: http://www.forbes.com/sites/tomgroenfeldt/2016/10/06/accenture-launches-a-way-to-edit-blockchains/#4f27c765373b http://www.forbes.com/sites/tomgroenfeldt/2016/10/06/accentu...
- petertodd 10y ago
  What I found especially amazing by that is traditional accounting is based on immutability already: you never delete a ledger entry, you add a correction. The same concept for a blockchain is trivial. Equally, if you _really_ do need to delete something, just insert a record into the blockchain instructing all nodes to delete that record. Sure, you won't be able to verify the chain 100% after you delete the data, but you'll have a auditable record of why that's the case.
  - unknownsavage 10y ago
    Actually their view point is perfectly consistent. They criticized _bitcoin_ not the blockchain. While a blockchain could support some of the regulatory required undo stuff (by appending a record that it's been undone), bitcoin itself certainly doesn't won't let you roll back a bunch of transactions.
    - petertodd 10y ago
      Read the PDF: they're working on a chameleon hash scheme so that their blockchain can be undetectably modified, not unlike making an accounting ledger with dry erase markers. That's going way beyond disagreeing with Bitcoin; what they're doing doesn't have the strong auditability that you'd expect from a "blockchain" solution. It's closer to a bog standard database really.
spangry 10y ago
Oh god, not this again. Sounds like Accenture are looking to bring in more 'technical integration' clients (read: marks). Government and old financial being the favourites, given their deep pockets and technical illiteracy. If anyone is in a job that involves holding back some of this insanity, this decision-flow diagram might help: http://i.imgur.com/4nZ67Sq.png http://i.imgur.com/4nZ67Sq.png
- sly010 10y ago
  There is a mistake on the diagram. The rightmost ellipse should say "you don't need a blockchain". The rest is accurate.
  - TeMPOraL 10y ago
    I'd say "you could use a blockchain". It does have some uses.
  - runeks 10y ago
    I agree. There's no need for a blockchain if two parties can find a mutually trusted third party: use 2-of-3 multi-signature with one of the public keys being that of the trusted party.
- cm2187 10y ago
  I'd add do you need high level of transactions per second. If you need to reverse a hash every time you make a transaction, that's not going to be fast or efficient. Also do you need transaction anonymity. A blockchain is also a public ledger. You may hide behind a secret key but everyone can see what that secret key is doing and has done since the begining. As soon as Morgan Stanley notices that this big trade has to be Goldman Sachs, then Morgan Stanley can observe all of the transactions that Goldman Sachs has done from the begining. That problem alone should close the debate. Markets need anonymity for all the other market players not to arbitrage your position.
  - 6nf 10y ago
    Bank clearance only happens once a day, no need for high TPS levels. They do not transfer money bank-to-bank for every transaction, they just add it up and make one settlement transaction at the end of the day.
bdamm 10y ago
They talk about "reconciliation". Is this the practice of moving actual money following a bank-to-bank transfer of money? Or is this strictly an auditing function? Any bankers want to comment on this?
- scrumper 10y ago
  Reconciliation is the frequently manual process of making sure your records match mine, and vice versa. It's burdensome in finance because of the proliferation of systems used at various stages of a trade, and the number of parties involved as well. Edit to expand on that a bit: it means making sure that every party involved in a trade has identical information. For a straightforward trade like an equity done on an exchange, it's more of an exception process. For more complex transactions where there are more data fields, it can be a very heavy process. Rough estimates put cost of reconciliation at tens of billions per year for banks, all of which has to be paid for somehow.
runeks 10y ago
Can anyone name a single success story about the use of blockchain technology to solve a specific problem, and how this problem was solved using blockchain technology (besides Bitcoin)?
- kneel 10y ago
  From an investment banks perspective a lot of the intrigue around 'blockchain technology' is due to the relative speed and security it offers. Investment banks have chosen to pursue 'blockchain technologies' rather than bitcoin because they don't like bitcoin's transparency. Here's the problem. Bitcoin is secure and fast because of it's transparency.
  - Phlarp 10y ago
    I think given the prevailing network conditions of the past 6-12 months the statement that "Bitcoin is fast" needs a [citation needed] qualifier.
    - kneel 10y ago
      'relative speed' Much faster than ACH payments, wire tranfers.
      - notahacker 10y ago
        and much slower than Visa, never mind the sorts of transactions where there are algorithms earning big bucks profits from frontrunning trades with millisecond advantages....
        kneel 10y ago
        Investment banks don't use Visa to transfer money and bitcoin isn't replacing electronic trading platforms.
        notahacker 10y ago
aarontyree 10y ago
Headline - 4.22.23 - The world banking market continues to struggle this spring. While blockchain financial services looked promising at the beginning of the decade, funneling as much as $12B per year from the human powered Financial Services sector, many viewed this as contributing to continuing wealth inequality. The "Decentralize and Replace" movement continues to grow. Many smaller banks have already folded, while larger banking institutions lobby for stronger regulations against decentralized blockchain technology...
tomblomfield 10y ago
Simply using software effectively could save banks billions a year. Not paying money to Accenture could also save billions.
- snarf21 10y ago
  Exactly. Note how the headline says up to $12B. Not paying Accenture to implement and then not use blockchain could save up to $50B every year!
edblarney 10y ago
Should read: 'Accenture finds a way to bill for another $12B a year in consulting services' :)
jamisteven 10y ago
Keywords: "up to"
omouse 10y ago
propping up the existing banking system isn't the point of blockchain; sure it could save money but it could generate more revenue than 12billion a year if used for a new banking system. the monopoly on credit has to end.
- elastic_church 10y ago
  its going to be fun when the banks and governments are issuing credit on blockchain assets, it is going to be a MESS when they go insolvent after the heist of their collateral. 2028? 2035? what year you guys think that'll happen
brilliantcode 10y ago
What every blockchain pumper imagines: Bank: We don't need another database Accenture: Did I mention it's powered by blockchain Bank: Shut up and take my money.
dogismycopilot 10y ago
I worked for Accenture for a very short time, and I will say that they have no idea what they are talking about, regardless of what it is. Somehow, I just found a charge for $3500 from Accenture on my credit report. It HAS to be from when I worked there. They either took back a bonus or thought that they paid me too much I guess. It's been years, I have never heard anything about it, and now my credit took a hit. Worst job/company ever would be an understatement. I quit in record time (<60 days).
- elastic_church 10y ago
  The only reason your credit "took a hit", based on the way those formulas work, is because it went to collections or because you have barely any credit. And both of those reasons are completely your fault.
- 100213010 10y ago
  Judging by the downvoting, it appears that you have hurt some delicate souls here.
parados 10y ago
Accenture's approach to open-source ideas is mostly via a glossy brochure [pdf] [1]. [1] https://www.accenture.com/t20150523T115642__w__/us-en/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Technology_9/Accenture-Open-Source-Brochure.pdf https://www.accenture.com/t20150523T115642__w__/us-en/_acnme...
gluczywo 10y ago
This is so terrible use case for blockchain. In a trusted environment blockchain might only introduce complexity and security problems. Hey, but isn't it what consulting is about?
harry8 10y ago
Banning all future contracts to accenture could save the banking industry vastly more than that. Or am I being unfair and unkind?

95 points by artsandsci 10y ago

"Their estimates did not include potential costs and investments required to deploy the technology." well, of course not... because then there would be no dramatic teaser headline. Accenture money grab here - presumably they've positioned themselves accordingly already?

saemil 10y ago
I agree with your sentiment. I do not see a scenario where financial institutions would agree to put their transactions into a distributed ledger with copies of the data (even encrypted) held by their competitors. If the financial institutions limit the ledger to computers within their control, what would be the benefit over a clustered database environment (I am assuming that most large financial institutions already have these).
- chejazi 10y ago
  > what would be the benefit over a clustered database With a blockchain, the database and the revision history would be part of the same artifact. Not sure how advantageous this is, however.
- cashmonkey85 10y ago
  The problem is without blockchain you don't have a meaningless buzzword to sell bullsh*t to banks. Blockchain is a vital technology for this. Cryptocurrency is the future but I've never talked to more snake oil sales people than when talking to "blockchain" companies. I marvel at people's ability to sell nothingness
  - J-dawg 10y ago
    I don't know much about blockchain, but the salespeople of big consultancy firms like Accenture are master snake oil merchants. When you combine the two it must be like a perfect storm of bullshit.
    - throwawayish 10y ago
      Like a shit tornado. Shirnado.
  - ng12 10y ago
    I worked in a consulting-type company for a bit and the most valuable lesson was that, generally speaking, nobody knows anything about anything. The most valuable institutions in the world have completely clueless people managing their tech and the ignorance only gets worse as you go up the chain. It all boils down to "nobody got fired for buying IBM". Your blockchain initiative is only to get you noticed enough to get promoted or hired to a better position somewhere else. By the time anybody realizes how worthless it was you're long gone.
    - cmollis 10y ago
      "nobody knows anything about anything". Actually, somebody knows, but they work for someone else.
bduerst 10y ago
They also cite "run some processes, like finance reporting". How would storing this data in a blockchain have less overhead than an http server? Or even a torrent? It seems like a hammer looking for a nail.
- bdamm 10y ago
  The discussion was around trustworthy data, so I think they want proof that a page served up and stored was in fact the actual page served up and stored, for later audit. HTTP doesn't give you that. Bittorrent doesn't give you that. But blockchain can, if you pay a fractional coin to store the hash of the page in the chain forever. With a reference to the page and to the transaction, you can then later determine whether the page is intact or has been modified. And for bonus points a signature could be stored as well.
  - bduerst 10y ago
    This is just passing the overhead cost to whomever is mining the network though. The trustworthiness of a blockchain comes from it's ability to repel attacks with computing power, with more power meaning more trustiness. This means tremendous overhead for a blockchain that could just as easily be performed with the centralized system we have now.
mcintyre1994 10y ago
Banks spending billions on complex technical processes could save billions if they replace those systems with a new system and you ignore all costs associated with implementing and running that system. Well yes, but..

otoburb 10y ago

Accenture is trying to augment their Financial Services[1] practice arm with blockchain capabilities and expertise. [1] https://www.accenture.com/us-en/service-blockchain-financial-services https://www.accenture.com/us-en/service-blockchain-financial...

godzillabrennus 10y ago

Blockchain is so badly needed in the startup world when allocating shares of a company. Eshares is promising but too pricey for bootstrapping entrepreneurs. An open standard with distributed tracking of shares allocated for any given company would help institute much more trust into startup investing. Right now it's kind of tough to do due dilligence on a small private company.

amluto 10y ago
> Blockchain is so badly needed in the startup world when allocating shares of a company. Eshares is promising but too pricey for bootstrapping entrepreneurs. What, exactly, does a blockchain have to do with this? ISTM all that's needed is a spreadsheet with an audit log, and even the audit log is somewhat optional.
- riprowan 10y ago
  In theory, an open blockchain like Bitcoin eliminates the need for a trusted authority to be the system of record. A spreadsheet needs someone to manage it. That person, and that data, must be very trustworthy, else they can simply change the data for their benefit. The compliance procedures that assure trustworthiness cost money. Lots of money. And they still fail. Blockchains, in theory, could also serve as a voting mechanism on splits, which could be manifested as blockchain hardforks. As Satoshi Nakamoto wrote: > The proof-of-work also solves the problem of determining representation in majority decision making. If the majority were based on one-IP-address-one-vote, it could be subverted by anyone able to allocate many IPs. Proof-of-work is essentially one-CPU-one-vote. The majority decision is represented by the longest chain, which has the greatest proof-of-work effort invested in it. Essentially a blockchain can codify the ownership of a stock share into a smart contract. That's the theory, and only insofar as it applies to a Proof of Work blockchain like Bitcoin. A private blockchain is more likely to be a Proof of Stake blockchain, in which shares (or tokens of other sorts) are issued in a "premine" which creates all of the tokens that will ever exist. These are then distributed to the initial group of trusted members of the private blockchain. From there, the blockchain can eliminate the need for a trusted authority to serve as the system of record of ownership.

wildchild 10y ago

Postgresql too.

ecesena 10y ago
I understand this was prob a sort of joke, but I'd be interested in a data point on how much a free db could help save. Is $12B reasonable, would it be much lower/higher?
- di4na 10y ago
  free maybe. The real point being that it is one that works. A big part of the financial but also the entreprisey world in general have never left the 80s/90s. The idea of scale does not exist.
- Alex3917 10y ago
  > I'd be interested in a data point on how much a free db could help save Database companies price their products by how much they think they can extract from your business. That's why they're mostly priced at free or some nominal cost for the first few years, and then several million dollars per year afterwards.
- cashmonkey85 10y ago
  Without a doubt higher. If you pore snake oil on your database it always slows it down a little

geodel 10y ago

I am not clear if the money saved is after paying off Accenture consultants or before. If it is after it is too good to be true.

patio11 10y ago

Blockchain here refers not to the distributed database technology loosely coupled with Bitcoin but rather "assert the existence of a database; simultaneous adoption of it across all parties that matter in the financial industry sure would be swell now wouldn't it." Which is true. Databases are pretty useful things. It's a shame banks never thought of adopting one before.

arjunnarayan 10y ago
"Another aspect of blockchain, as I often emphasize, is sociological: Blockchains are cool. If you announce that you are updating the database software used by a consortium of banks to track derivatives trades, the New York Times will not write an article about it. If you say that you are blockchaining the blockchain software used by a blockchain of blockchains to blockchain blockchain blockchains, the New York Times will blockchain a blockchain about it." https://www.bloomberg.com/view/articles/2017-01-10/bank-blockchains-and-an-alibaba-box https://www.bloomberg.com/view/articles/2017-01-10/bank-bloc...
- patio11 10y ago
  It's basically impossible for me to have any insight on the financial markets which has not already been said, better, by Matt Levine.
  - eternalban 10y ago
    He omitted to mention dark pools & how blockchains can help there. https://en.wikipedia.org/wiki/Dark_liquidity https://en.wikipedia.org/wiki/Dark_liquidity [p.s.] The "social" angle was the most ridiculous thing I've ever [read]. Yeah, let's pour in tons of money to build a tech so it gets printed in the New York Times. Is this guy for real?
- bduerst 10y ago
  This is tangental, but his analysis of Uber seems to be spot on: >Eventually there will be self-driving cars, and there's no special reason to think that Uber will be the best at building them, or that its dominant position in the ride-hailing-app space will protect it from better self-driving-car businesses.

josu 10y ago

For context, Accenture has been criticizing blockchains for their immutability. [1] [2] [3] So I would not take anything coming from them seriously. [1] Downside of Bitcoin: A Ledger That Can’t Be Corrected: http://www.nytimes.com/2016/09/10/business/dealbook/downside-of-virtual-currencies-a-ledger-that-cant-be-corrected.html?_r=0 http://www.nytimes.com/2016/09/10/business/dealbook/downside... [2] EDITING THE UNEDITABLE BLOCKCHAIN (PDF) https://www.accenture.com/t20160927T033514__w__/us-en/_acnmedia/PDF-33/Accenture-Editing-Uneditable-Blockchain.pdf https://www.accenture.com/t20160927T033514__w__/us-en/_acnme... [3] Accenture Launches A Way To Edit Blockchains: http://www.forbes.com/sites/tomgroenfeldt/2016/10/06/accenture-launches-a-way-to-edit-blockchains/#4f27c765373b http://www.forbes.com/sites/tomgroenfeldt/2016/10/06/accentu...

petertodd 10y ago
What I found especially amazing by that is traditional accounting is based on immutability already: you never delete a ledger entry, you add a correction. The same concept for a blockchain is trivial. Equally, if you _really_ do need to delete something, just insert a record into the blockchain instructing all nodes to delete that record. Sure, you won't be able to verify the chain 100% after you delete the data, but you'll have a auditable record of why that's the case.
- unknownsavage 10y ago
  Actually their view point is perfectly consistent. They criticized _bitcoin_ not the blockchain. While a blockchain could support some of the regulatory required undo stuff (by appending a record that it's been undone), bitcoin itself certainly doesn't won't let you roll back a bunch of transactions.
  - petertodd 10y ago
    Read the PDF: they're working on a chameleon hash scheme so that their blockchain can be undetectably modified, not unlike making an accounting ledger with dry erase markers. That's going way beyond disagreeing with Bitcoin; what they're doing doesn't have the strong auditability that you'd expect from a "blockchain" solution. It's closer to a bog standard database really.

spangry 10y ago

Oh god, not this again. Sounds like Accenture are looking to bring in more 'technical integration' clients (read: marks). Government and old financial being the favourites, given their deep pockets and technical illiteracy. If anyone is in a job that involves holding back some of this insanity, this decision-flow diagram might help: http://i.imgur.com/4nZ67Sq.png http://i.imgur.com/4nZ67Sq.png

sly010 10y ago
There is a mistake on the diagram. The rightmost ellipse should say "you don't need a blockchain". The rest is accurate.
- TeMPOraL 10y ago
  I'd say "you could use a blockchain". It does have some uses.
- runeks 10y ago
  I agree. There's no need for a blockchain if two parties can find a mutually trusted third party: use 2-of-3 multi-signature with one of the public keys being that of the trusted party.
cm2187 10y ago
I'd add do you need high level of transactions per second. If you need to reverse a hash every time you make a transaction, that's not going to be fast or efficient. Also do you need transaction anonymity. A blockchain is also a public ledger. You may hide behind a secret key but everyone can see what that secret key is doing and has done since the begining. As soon as Morgan Stanley notices that this big trade has to be Goldman Sachs, then Morgan Stanley can observe all of the transactions that Goldman Sachs has done from the begining. That problem alone should close the debate. Markets need anonymity for all the other market players not to arbitrage your position.
- 6nf 10y ago
  Bank clearance only happens once a day, no need for high TPS levels. They do not transfer money bank-to-bank for every transaction, they just add it up and make one settlement transaction at the end of the day.

bdamm 10y ago

They talk about "reconciliation". Is this the practice of moving actual money following a bank-to-bank transfer of money? Or is this strictly an auditing function? Any bankers want to comment on this?

scrumper 10y ago
Reconciliation is the frequently manual process of making sure your records match mine, and vice versa. It's burdensome in finance because of the proliferation of systems used at various stages of a trade, and the number of parties involved as well. Edit to expand on that a bit: it means making sure that every party involved in a trade has identical information. For a straightforward trade like an equity done on an exchange, it's more of an exception process. For more complex transactions where there are more data fields, it can be a very heavy process. Rough estimates put cost of reconciliation at tens of billions per year for banks, all of which has to be paid for somehow.

runeks 10y ago

Can anyone name a single success story about the use of blockchain technology to solve a specific problem, and how this problem was solved using blockchain technology (besides Bitcoin)?

kneel 10y ago
From an investment banks perspective a lot of the intrigue around 'blockchain technology' is due to the relative speed and security it offers. Investment banks have chosen to pursue 'blockchain technologies' rather than bitcoin because they don't like bitcoin's transparency. Here's the problem. Bitcoin is secure and fast because of it's transparency.
- Phlarp 10y ago
  I think given the prevailing network conditions of the past 6-12 months the statement that "Bitcoin is fast" needs a [citation needed] qualifier.
  - kneel 10y ago
    'relative speed' Much faster than ACH payments, wire tranfers.
    - notahacker 10y ago
      and much slower than Visa, never mind the sorts of transactions where there are algorithms earning big bucks profits from frontrunning trades with millisecond advantages....
      - kneel 10y ago
        Investment banks don't use Visa to transfer money and bitcoin isn't replacing electronic trading platforms.
        notahacker 10y ago

aarontyree 10y ago

Headline - 4.22.23 - The world banking market continues to struggle this spring. While blockchain financial services looked promising at the beginning of the decade, funneling as much as $12B per year from the human powered Financial Services sector, many viewed this as contributing to continuing wealth inequality. The "Decentralize and Replace" movement continues to grow. Many smaller banks have already folded, while larger banking institutions lobby for stronger regulations against decentralized blockchain technology...

tomblomfield 10y ago

Simply using software effectively could save banks billions a year. Not paying money to Accenture could also save billions.

snarf21 10y ago
Exactly. Note how the headline says up to $12B. Not paying Accenture to implement and then not use blockchain could save up to $50B every year!

edblarney 10y ago

Should read: 'Accenture finds a way to bill for another $12B a year in consulting services' :)

jamisteven 10y ago

Keywords: "up to"

omouse 10y ago

propping up the existing banking system isn't the point of blockchain; sure it could save money but it could generate more revenue than 12billion a year if used for a new banking system. the monopoly on credit has to end.

elastic_church 10y ago
its going to be fun when the banks and governments are issuing credit on blockchain assets, it is going to be a MESS when they go insolvent after the heist of their collateral. 2028? 2035? what year you guys think that'll happen

brilliantcode 10y ago

What every blockchain pumper imagines: Bank: We don't need another database Accenture: Did I mention it's powered by blockchain Bank: Shut up and take my money.

dogismycopilot 10y ago

I worked for Accenture for a very short time, and I will say that they have no idea what they are talking about, regardless of what it is. Somehow, I just found a charge for $3500 from Accenture on my credit report. It HAS to be from when I worked there. They either took back a bonus or thought that they paid me too much I guess. It's been years, I have never heard anything about it, and now my credit took a hit. Worst job/company ever would be an understatement. I quit in record time (<60 days).

elastic_church 10y ago
The only reason your credit "took a hit", based on the way those formulas work, is because it went to collections or because you have barely any credit. And both of those reasons are completely your fault.
100213010 10y ago
Judging by the downvoting, it appears that you have hurt some delicate souls here.

parados 10y ago

Accenture's approach to open-source ideas is mostly via a glossy brochure [pdf] [1]. [1] https://www.accenture.com/t20150523T115642__w__/us-en/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Technology_9/Accenture-Open-Source-Brochure.pdf https://www.accenture.com/t20150523T115642__w__/us-en/_acnme...

gluczywo 10y ago

This is so terrible use case for blockchain. In a trusted environment blockchain might only introduce complexity and security problems. Hey, but isn't it what consulting is about?

harry8 10y ago

Banning all future contracts to accenture could save the banking industry vastly more than that. Or am I being unfair and unkind?