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Wall Street rethinks blockchain projects as euphoria meets reality

• ppeetteerr 9y ago
  My question is if your conclusion is that blockchain is a solution in search of a problem, what was all that effort being spent on (not just in finance, but everywhere blockchain is being considered)? I'm not saying that blockchain is not a valid solution to a problem, but as a veteran of the online industry, I can say I've seen a lot of hype around new technology, actual effort being put into it, and then the realization that the effort was for nothing. Either the solution is no better than the old solution, just different, or the solution is so obscure, that the cost of maintaining it is greater than the value it generates. In the end, the costs of the choices of these institutions are being paid for by you and I, and I hope they don't go too deep into their project before realizing: “Basically, it became a solution in search of a problem,”
  • jerf 9y ago
    "My question is if this is your conclusion is that it's a solution in search of a problem, what was all that effort being spent on (not just in finance, but everywhere blockchain is being considered)?" That strikes me as a very rich question that would be interesting to investigate. Yes, we know people can get involved in hype cycles, but what was it about this technology that made it the thing that got hyped exactly? Perhaps a subconscious association with BitCoin and getting rich quick hit the people most prone to hype? Some of the blockchain projects being proposed, I honestly couldn't see how they were planning on profiting from it. I don't just mean profiting enough, but profiting at all; what was the mechanism by which money is transferred from some set of customers to the blockchain creators? Preferably with the transfer of some valuable good or service in the other direction, but, you know, technically that's optional from a business perspective. I understand the answer for new cryptocurrencies; the creators start with more of it than the incoming users and that becomes valuable as the currency becomes valuable. The non-currencies I didn't always see an answer. Which is why my best guess is some sort of subconscious belief that anything that has a blockchain will automatically somehow become wildly valuable via (underpants gnomes step 2 here). It's kinda a copout answer but it's the best I've got. Improvements? (Again, beyond just "people do hype." Why this hype and not something else?)
    • Mtinie 9y ago
      I look at it differently: Brick-and-mortar plus mail-order was a viable business model for decades. Building the network infrastructure and software interconnections to move from that state to today’s online commerce and delivery model took years to accomplish and was (is) filled with hyped innovations. Blockchains may never reach their hyped potential, or we may simply be attempting to evaluate at very early stages vs. the point where utilities are clear.
      • mulmen 9y ago
        Do you look at every single new technology this way? If so how do you find time for anything else? If not what makes blockchain different?
        • Mtinie 9y ago
          I’m not sure I follow. I did not mean to imply I’m studiously watching every permutation of the blockchain hype cycle, simply, when it comes to new technologies which are billed as successors to long-lived incumbencies, I tend to take the middle ground. I try to keep a measured view of the optimisic hype and the pessimistic nay-saying, and don’t expect clarity for a few more years regarding blockchains’ potential. In general this philosophy towards technology has served me well enough. I miss out on the bleeding edge, but don’t fall into the trap of being “all in” before realizing a concept’s promise was oversold.
    • dboreham 9y ago
      Asymmetry: it is very hard to irrefutably defeat someone proposing some highly amazing, low-probability-of-coming-to-pass future. The best you can do is say "hard to see how that happens, but who knows?..." Meanwhile the bullshitter is utterly convinced by their own koolaid. In the end it is a bug in the human brain firmware.
  • rambossa 9y ago
    My major questions have always been: where is the business value in blockchain applications? what can a blockchain app do that can't be done by non-blockchain (beyond decentralization - bc I don't think this produces much business value)?
    • onion-soup 9y ago
      Sending money without fees and delay? Have you ever tried a normal bank transfer? How long did it take? Have you ever tried, say, nano? It literally takes seconds and 0 fees. Here is some value.
      • boffinism 9y ago
        In the UK we can do that without the blockchain, in many situations, thanks to the real-time payment system [0]. So for me, a normal bank transfer is free and easy, whereas every time I've tried to do something involving blockchain it's meant delays, fees, and messing around on shady-looking websites. I take the point that in other places the norm is a lot worse and blockchain systems are producing better results, but it won't be long before banks get their act together and improve their services to match modern expectations (for fear of becoming obsolete), and then the blockchain competitive advantage is gone. [0] http://www.fasterpayments.org.uk/ http://www.fasterpayments.org.uk/
      • pxmpxm 9y ago
        The delay and cost is a function of mandatory compliance and recourse, rather than anything to do with technology.
        • SlowRobotAhead 9y ago
          I’m glad some people get it. Banks do zero delay and zero cost transactions between themselves already. The idea that “if only we coukd figure out where to use blockchain, everything would be FREE” is really naive. You take away a banks ability to charge for X, don’t be surprised when Y gets a new fee. As to decentralized, there seems to be a wonderful libritarian ideal around cryptocommodities but I’m reality they are much more centralized than anyone wants to admit. There are probably 10 people that if they wanted to could absolutely demolish bitcoin. Too much hype around all of this. Not even getting into the massive waste of power and potential.
  • scrooched_moose 9y ago
    > what was all that effort being spent on Not being left behind if you're wrong. I'm in a tech-adjacent industry and see it all the time. Competitor A comes out with "shiny new technology" and markets the hell out of it. My company panics because we're suddenly lagging behind and rushes a competing project into development. Competitor B sees all of this and hops in too. All of a sudden it's the new direction of the industry and dominating trade shows, despite the origin being a mediocre product with some clever marketing. 5 years later it's never spoken of again. I'm not familiar enough to say for sure this is what happened with "blockchain", but from a distance it has a lot of familiar markers.
    • johnchristopher 9y ago
      An example from the top of your head ?
      • scrooched_moose 9y ago
        GPU acceleration in scientific computing. My god in 2011 it was the only thing anyone talked about. Every COTS solver package cobbled together support in less than a year and were promising order of magnitude speedups. In 2018 it's still hanging around but realizing a 20% speedup on certain classes of problems. Maybe.
        • bushin 9y ago
          Amdahl's law strikes again.
        • saganus 9y ago
          Didn't that tech shifted to AI/ML? Isn't that considered scientific computing by some measure? I'm definitely not an expert so I'm maybe missing something here.
          • scrooched_moose 9y ago
            "Scientific Computing" was probably too general of a term to use. I focus more on FEA/CFD type problems where it's effectively been a bust. Most of our benchmarks show 8 cpu cores + 1 GPU is roughly equivalent to 10 cpu cores, and a second GPU has little additional benefit. I'm sure there are other disciplines that have seen a larger benefit.
  • amygdyl 9y ago
    I flippantly thought, from the first time about when I was reading about dark pools in the financial times newspaper, the delay in reporting less interesting than I hadn't expected the reporting, I have felt as if the bankers were unravelling their own life support and ecosystem, without realising what they are doing. Dark pools existed for advancing business in a grey area of regulatory distinction. This is the habituated purpose of the modern banker. The most important exposition of the expansion of banks into grey area meaning uncertain legal ground in which crucially the advantage of any interpretation and codification by case law, is strongly to the advantage of who can deploy the greater resources, must be "Wriston" the biography of Walter Wriston, who created the modern Citibank from the National City Bank of New York. Precisely by expansion in grey areas of business. But the ad absurdam finality of creating ever more custom trading venues, is that you inevitably end up only being able to game yourself. The professional advantage of executing in a public market is replaced by the mind rotting process of writing your own rules and looking for where you can faithfully attest you weren't developing a rule for suitability for your trading desk abilities, you either accept you know that your own rules are already beaten by your own operations and become at best a pragmatist, of you devolve into second guessing the nature of your own company to be able to claim your rules are unbiased neutral and blind to be fair to all comers. This has turned banks into navel gazers not Watchmen over economic instability and guards of our capacity of production in daily life and ready in case of war. The regulation was wanted by banks to assure the public. This move to reliance on in house mechanisms for all of your flow, eliminate the advantage of regulation. This erodes the raisin detre of regulatory government but it far worse dissolves the conveyance of trust from government institution that the regulated bank enjoys. I am saying that one day I realised that the behaviour of banks had become self destructive and it wasn't a flu or affliction but a inherent character trait come out of much poorly understood history I think is too important to never let the public see. We need the institutions to function, too.
• nwah1 9y ago
  It is interesting that even in an article like this that they still say things like "for all its potential, blockchain is still in its early days." It is sticking with the unfounded assumption that it will be a success in the future, if only it is given more time. In technological terms, it is old. Innumerable efforts have been attempted, yielding almost no fruit. At what point are the fundamental assumptions going to be questioned?
  • hudon 9y ago
    I think the fundamental assumption is that "Satoshi invented a useful solution to decentralized consensus". What people don't realize is that Satoshi's solution only works if two assumptions hold true: 1. Mining is decentralized: If mining is centralized than relying on proof-of-work for consensus is waste since the centralized entity controls the blockchain anyway. 2. Consensus rules don't change: If you see the threat of #1 and so take power away from miners (like Bitcoin has done), then you cannot ever change the consensus ruleset because aside from proof-of-work, Satoshi did not give any solution to the problem of choosing between 2 chains that have slightly different consensus rules. If you change the consensus ruleset (ie. make any changes where 2 nodes disagree on if a block is valid or not), then you need an oracle to tell you which chain to choose. We've seen this when Core developers chose the 0.7 Bitcoin chain in 2013 and when Vitalik chose the forked Ethereum chain in 2016. At the end of the day, the blockchain's decentralization is a myth because it relies on false assumptions. Satoshi invented a Rube Goldberg machine that is currently using as much electricity as a medium-sized country (and also enabling things like money laundering, drug trafficking, etc.).
    • darawk 9y ago
      It's pretty clear that neither of those things are actual problems, though. There are plenty of issues with crypto-currencies - those just aren't it.
      • deleted 9y ago
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    • 9y ago
• pxmpxm 9y ago
  DTCC is a central authority by definition; there's no amount of handwaving that you can do to make a distributed quorum system fit this particular problem...unless you're just trying to raise VC money.
• arisAlexis 9y ago
  wall street is buying now from panic selling grandmothers that entered in December. it has always been like that in immature markets.
  • misja111 9y ago
    The article is about blockchain projects. Not about people selling their bitcoins.
  • RosanaAnaDana 9y ago
    1 doge is still 1 doge.
• tudorconstantin 9y ago
  Of course banks can do it better with the traditional technologies. They operate in a centralized, trusted and regulated environment. Their consensus algorithm is "settling disputes in courts". And still, it takes up to 5 days to receive a payment from USA in the EU and the sender pays 40$ for the wire transfer. The blockchain technologies will disrupt the banks themselves, because they are the intermediaries in this industry. I can receive the equivalent of $1 mil in BTC from oversea in less than 10 minutes and the sender pays fractions of a dollar in fees. The banks will be in a tough position the more people accept payments for their services and products in BTC. We're not there yet, of course, but who knows where we'll be in 5-10-20 years.
  • collyw 9y ago
    Whats to stop a new bank springing up and allowing transfers a lot faster and cheaper using traditional methods?
    • kerkeslager 9y ago
      What's stopping them is a simple question: who are you transferring the money to? A lot of banks allow customers to do instant transfers between customers of that bank, but for this to be a killer feature, you have to have enough customers that this is significant. In NYC, Chase is almost there--they have enough of a share of NYC that it's worth asking if the person you're transferring to has Chase so you can use their instant transfer system. But the vast majority of transactions are still between customers of different banks, and there's not much reason for a bank to process a competitor's payment quickly--it doesn't give you a competitive advantage, while processing slowly allows you to collect interest on the money while it's in transit.
      • bpicolo 9y ago
        > But the vast majority of transactions are still between customers of different banks, and there's not much reason for a bank to process a competitor's payment quickly But they're doing exactly this now with Zelle.
• this_user 9y ago
  What does "blockchain" even mean in this generalised context? When we are talking about crypto currencies, it is a distributed database with a consensus mechanism that is extremely costly to run. But this is not something you would need or want in most other situations, because there is always some degree of trust with your counterparties (and legal recourse if necessary). If we strip away the consensus mechanism, all that is left is a trivial data structure that anyone with a CS background could come up with. So, the question becomes where the real value proposition is in "blockchain technology" outside of the realm of crypto currencies. What are the things you can only do with "blockchain technology" that cannot be achieved with existing technology? It looks more like a marketing buzzword than anything that has actual merit for the average use case.
  • toomuchtodo 9y ago
    Blockchain is simply a sexy term for a distributed ledger, which has its place in a limited set of use cases.
    • RyanShook 9y ago
      The question that no one bothers to ask is, "What problem is this technology solving that can't be solved cheaper and just as effectively with 'traditional' technology?" When you look at it this way I think the realistic use cases go way down.
      • throwawaylolx 9y ago
        People have been asking and answering these questions for almost ten years. Brief list off the top of my head: - Seamless global payments - Store of value - File storage - Decentralized exchanges - DNS lookup - Prediction markets - International contracts - Untraceable payments - e-Voting - Copyright or proof of ownership - Distributed computing It simply gets tiring for people to argue ad infinitum about this with every non-believer.
        • toomuchtodo 9y ago
• cvaidya1986 9y ago
  Ron Conway, early investor in the internet, said recently that the Blockchain is internet 3.0
  • haakon 9y ago
    I mostly hear it described as Internet 2.0, or Web 3.0. However, analysts are starting to talk about Blockchain 2.0 now; this could probably fill the role of Internet 3.0. None of these people have any idea what they're talking about.
    • cvaidya1986 9y ago
      Trying to predict the future is tricky, however, you can try to see where it’s all going without knowing all the details.
• drieddust 9y ago
  Looking at the history of Wall Street, it should be safe to predict that Block chain technology will be the reason for next global meltdown. They can and will do wonders generating derivates after derivates and make huge bonuses. I have never understood why financial instruments like derivates like options etc. exists. I understand what they do but I do not understand what value they add to the economy specifically.
  • JoeAltmaier 9y ago
    Don't add any value, of course they are entropy. But they do aid in liquidity, which is like a coefficient of money flow.
  • paulgb 9y ago
    If you agree with the premise that regular equities markets provide value (in that competitive allocation of capital leads to a more optimal result than centralized allocation), it seems to follow pretty naturally that derivatives and options provide value by allowing participants in the market to turn more nuanced beliefs into a position than they could otherwise.
• dqpb 9y ago
  If projects we're ever based on the market price of bitcoins, then they were ill-founded. If projects we're based on the technical features of a block chain architecture then the decline of euphoria is irrelevant.
• sebringj 9y ago
  Isn't the core still being worked on? Meaning things like the lightening network and proof of stake? There has been tremendous buzz about this tech even in its limited state so imagine when it becomes very friendly/usable/stable/focused/possibly efficient... in use case and where things like Mt. Gox don't happen anymore. I think its a work in progress and we are at the whim of the impatient and non-technical media.
  • throwawaylolx 9y ago
    It is. These speculation cycles come and go regularly. HN general knowledge of blockchain is similar to HN general knowledge of AI: slightly above average. There are many smart engineers laying down the foundations of the Bitcoin protocol as we speak, and the hype cycle will come back.
    • c06n 9y ago
      You bought your crypto in December/January, haven't you?
• rsynnott 9y ago
  > The project, which had successfully tested with startup Digital Asset Holdings (DA), was shelved because banks and other potential users believed the same results could be achieved more cheaply using current technology, he said. This is more or less the curse of the almighty blockchain; it's very hard to think of a plausible, actually useful, application which can't be accomplished far more cheaply and simply using conventional means.
  • deleted 9y ago
    [deleted]
  • kerkeslager 9y ago
    It's really not hard to think of useful applications for blockchain. The problem HN has with blockchain is that a lot of HN users are the problem which decentralization solves. The basic startup monetization strategies these days revolve around centralizing user data and then collecting rent (usually in the form of ads) or centralizing transactions and then collecting a percentage. Decentralization is the antithesis of these models: you can't collect rent or percentages if you don't have centralized control of the platform. The problem blockchain solves is that it cuts out a lot of middle men and what middle men it leaves (miners) have to compete. For the vast majority of HN users, blockchain doesn't solve problems you want to solve, but that shouldn't be mistaken for meaning that blockchain isn't a revolutionary technology that solves a lot of problems. If anything, the technology is important because it affects your future. Data and transaction middle men are the problem that blockchain solves, and as middle men you should be paying attention. I don't hold any resentment toward people trying to run a centralized business, but I do find it amusing when people are pushing blockchain forward to their own detriment.
    • phpnode 9y ago
      > It's really not hard to think of useful applications for blockchain. Then please list some useful, concrete applications of blockchain that would not be solved better and cheaper by a normal database.
      • 9y ago
• misiti3780 9y ago
  So what does that mean for companies like this https://axoni.com/ https://axoni.com/?
• kyloon 9y ago
  Basically the finance industry is trying to shoehorn their legacy business systems into blockchain, which of course will not make any advantage obvious other than finding out it is much more difficult to reimplement what is already working with a different system. My view on this is that blockchain ought to find a very specific problem (e.g. trust as a service) that cannot be achieve with existing technology.
• mad44 9y ago
  I have been trying to see why full p2p decentralization matters, but am unable to find much support for it. [1] https://muratbuffalo.blogspot.com/2018/03/change-my-mind-about-why.html https://muratbuffalo.blogspot.com/2018/03/change-my-mind-abo... [2] https://muratbuffalo.blogspot.com/2018/02/blockchains-from-distributed-computing.html https://muratbuffalo.blogspot.com/2018/02/blockchains-from-d... The applications of full p2p decentralization are also not clear: [3] https://muratbuffalo.blogspot.com/2018/03/blockchain-applications-in-supply-chain.html https://muratbuffalo.blogspot.com/2018/03/blockchain-applica... [4] https://muratbuffalo.blogspot.com/2018/02/paper-review-ipfs-content-addressed.html https://muratbuffalo.blogspot.com/2018/02/paper-review-ipfs-...
  • chrisco255 9y ago
    https://medium.com/@cdixon/why-decentralization-matters-5e3f79f7638e https://medium.com/@cdixon/why-decentralization-matters-5e3f...
• granaldo 9y ago
  The great correction is here https://www.coingecko.com/en https://www.coingecko.com/en shows total red Everyone needs to start waking up. Blockchain solves transfer of value really well, took years for it to prove that it works. What has the other projects proven?
• soneca 9y ago
  I think blockchain is like 3D movies. It is intriguing enough to put the foot on the door of public imagination so people with vested interests have a crack to keep pushing their agenda through.
• hapnin 9y ago
  I've been hearing about imminent death of Bitcoin and the pointlessness of blockchain since 2010. I predict that won't change in the future.
• deleted 9y ago
  [deleted]
• jfasi 9y ago
  I get suspicious whenever I read about companies piling on to technology trends, not least because of the damage it does to the rank and file developers who work on it. The short version is: leaders got bamboozled and their subordinates suffered, but it's a little more nuanced than that. We tend to think of large companies as either these monolithic beasts that act according to their own best interests, or as emergent hiveminds that move in a direction because they smell money. These have the advantage of allowing us to presume that the actions taken by these organizations were vetted by many people and arrived at via consensus. However, there is a third, less popular, way to view organizations, and that's as an organ of a handful of people, if not one person. This is an important framing because it allows us to consider the actions of these large companies as reflecting the foibles of the individuals at the helm. Viewed this way, Apple under Steve Jobs was an extension of one man's vision and design priorities. Microsoft under Ballmer was an extension of one man's putting the MBA approave above the tech approach. I can't help but wonder if, within these Wall Street companies as well as throughout SV, there wasn't a single person or a handful of people who swallowed the blockchain coolaid and started these projects. Pitched high hopes to developers. Hired developers. Set goals. Failed to meet goals. Made their developers' lives miserable. Gave up. Blamed their subordinates. Moved on. This is a tale as old as tech itself, but somehow it just keeps happening. To all young developers deciding where to invest their time and talent: be very careful choosing to follow an individual, because individuals are stupid enough to fall for nonsense like "blockchain for banking."
  • woah 9y ago
    What is the supposed persecution of developers you’re alluding to here?
• donmatito 9y ago
  Coming from a logistics background, coordinating tracability data is painful within a company, even with help of ERP like SAP. But when you need tracability across an industry, it becomes almost impossible. I had professional experience in an industry where we had to go to the plants to ensure rolls of paper certified from suppliers using responsibly-managed forests were physically separated from the non-certified ones. We needed the paperwork coming from China, then another one from the transformation plant in Morocco, then in customer warehouses across Europe. An external protocol that would provide universal tracability, usable by any actor of the chain, seem like a great solution to a real problem. Blockchain provides some "neutrality", ie no need for each actor to find its own certificate provider (I imagine that service shops would help larger companies set up their systems, but the back-end would be common across all actors). I'm not very convinced by pseudo-decentralized apps in most domains, but in logistics... very bullish !
  • cm2187 9y ago
    wouldn't a simple system of signatures certified by a certificate authority (like for the web) solve this problem in a much more direct way?
    • ravenstine 9y ago
      What's to keep a party from chucking out a signed document that they don't like?
      • jpollock 9y ago
        The check is a positive one for presence. Items which aren't tagged are untrusted. If they throw out a signature they don't like, the system works perfectly fine - it's treated like any other untrusted product. No one should trust a system that has a "don't trust this, it's bad" flag, it should always be "trust this, it's clean".
      • spookthesunset 9y ago
        > What's to keep a party from chucking out a signed document that they don't like? Courts. Laws. Governments.
• segmondy 9y ago
  Wall Street only cares about money extraction. Blockchain projects are currently milked dry with no where to squeeze out money. It's no surprise that they are "rethinking" it. If it should start growing fat again with lots of opportunities to extract money, Wall street will jump right back in.
  • prostoalex 9y ago
    They're fairly receptive to technologies that decrease their operating costs. If there was a scenario where blockchain-based solution was cheaper to operate than their current database tech, you'd think they'd be all over it.
• craigc 9y ago
  I would take any article like this with a grain of salt. There is not a lot of useful or technical information here, and I believe it is more designed as click bait and FUD to create shock value and hurt the public sentiment about Blockchain technology and investing in crypto currencies. That said, on the flip side, a lot of people have been considering Blockchain as some kind of magic solution to all of the world’s problems, and that is also very far from reality. If it takes an article in Reuters for people to realize this than so be it. I have believed for a while that Blockchain technology in the context that many big companies refer to it is not very useful. Usually these are the same people who claim that Bitcoin is useless and Blockchain technology is where the real value is. I think they are either mistaken or misinformed. In my opinion, anyone who plans to build a centrally controlled Blockchain is making a mistake. Even if the data is signed/hashed and distributed, it only takes one bad actor inside the organization who has access to the nodes to alter the Blockchain by performing a 51% attack (changing the transaction data on more than half of the nodes). Therefore the entire idea of a Blockchain being immutable is thrown out the window. You would be much better off using an open source database like MySQL or Postgres or Mongo. Blockchains are expensive to run and operate and are extremely slow. However, the idea that Blockchains are a solution in search of a problem that the article suggests is also a bit misleading. I think it’s more likely that these companies are trying to find solutions for things that aren’t problems in the first place which isn’t the fault of Blockchain technology itself. I feel pretty strongly that blockchains have already solved a few problems. - They solve the double spending problem (the idea that the same tokens can be spent more than once) - They allow people to store value without depending on any third party (such as a bank) - They remove all the intermediaries required for sending payments/data from one person to another. - They make it cheaper and faster to send any amount of money to anyone in the world To me, those are all transformative properties of blockchains, and anyone who overlooks them is somewhat missing the point. That said, in order to check off all these bullet points, you need to have a peer to peer, decentralized network where peers are rewarded with crypto currencies for securing the network, not just a few servers running inside of a company as a replacement for a centralized database. Will there be good Blockchain applications outside of crypto currencies? I’m not sure, but to me, there is nothing wrong with that. If, in the future, banks and cash become obsolete and everyone stores their money on their own secure, digital wallets, then I would say that Blockchain technology changed the world for the better.
• _bxg1 9y ago
  So that iced tea company that announced it was entering the blockchain space didn't pan out, hm?
• antsykarbo 9y ago
  Vast majority of projects don't need the complexity of a multi-master geographically distributed append-only immutable database with uncertain transaction finality because other, simpler and better understood solutions already exist. Vast majority of projects don't have to deal with the Byzantine Generals problem that makes it so difficult to create a permissionless distributed value transfer system like Bitcoin. Right tool for the right job.
• wol_ 9y ago
  blockchains have been on their way out since 2009.
• deleted 9y ago
  [deleted]
• abbieseide 9y ago
  At the end of the day there are tons of practical applications for blockchain. There is a lot that is staked on bitcoin and other cryptos and that will probably decline until the blockchain's true value is hit. That being said institutional investors will still want to play this market. JP Morgan and Morgan Stanley are still planning to build clearing houses for crypto this summer. https://altcoinreport.co/morgan-stanley-clear-bitcoin-futures-clients-2018/ https://altcoinreport.co/morgan-stanley-clear-bitcoin-future...
• speedplane 9y ago
  I've never understood why large companies want to get into blockchain. At best, a distributed ledger (blockchain or not), is able to provide a trustworthy database that anyone can engage with. Large banks also provide a trustworthy database, but which only they can edit. With blockchain, the trust is built upon protocols and technology. With banks, the trust is built upon reputation and insurance. They seem in direct competition with each other.
  • lucozade 9y ago
    There’s probably not a lot of interest for retail use for the reasons you state. Outside of wealth management that is more about the cryptocurrencies than the tech. But there is still interest in peer to peer usage. When each bank keeps their own version(s) of the truth, the cost of reconciling, resolving disputes etc is huge. The most interesting features, in this scenario, are the mutable->immutable and time ordering aspects. The literal blockchain, in other words. The consensus and transparency aspects aren’t particularly interesting though. And the key (excuse the pun) to these useful aspects is the cryptography used in interesting ways. Blockchains didn’t invent any of this stuff but they did open people’s eyes to the possibilities.
    • speedplane 9y ago
      > When each bank keeps their own version(s) of the truth, the cost of reconciling, resolving disputes etc is huge I'm not a banker, but I'm not sure I entirely believe this. There is undoubtedly a cost of reconciliation, but is it "huge"? Seems low on the totem poll.
      • lucozade 9y ago
        10s of millions per year per bank. More for the really big banks. Thay have large totem poles. Edit. That’s not including the op risk of screwing up. That has costs too and can easily reach millions
        • speedplane 9y ago
• chris123 9y ago
  This is part of their learning process. Like with the Internet. Eventually they will figure it out.