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There's absolutely zero evidence for the headline in the actual bulk of the article. SWIFT launched a new service last year, that is now handling 25% of all cr

There's absolutely zero evidence for the headline in the actual bulk of the article. SWIFT launched a new service last year, that is now handling 25% of all cross-border transactions, to the tune of 100 billion USD per day. Meanwhile, Bitcoin peaked last year at a total trading volume of 5 billion USD per day, and is now doing less than 1 billion per day. How much of that is cross-border is unknown, but even assuming 100%, it's still a tiny fraction of what SWIFT is handling. Extrapolating from that that cryptocurrencies somehow drove SWIFT to launch their new service is a bit of a stretch to put it mildly.

buckie 8y ago
SWITH gpi was announced in 2015, piloted in 2016, and incorporated a blockchain PoC in 2017[1]. While only SWIFT knows if cryptocurrency was part of the conversation at the start, I'd be surprised if it didn't at least come up very early on. In the context of how the politics of upgrading a bank's stack work, "driving" is the wrong word because in that context there are always people trying to drive "innovation". A better word is tailwind. Generally, banking tech is pretty crappy and good technologist can easily spot places where a big upgrade (aka "innovation") is warranted. The problem these people run into when lobbying for the upgrade is overcoming the hurdle of migration risk. The bigger the project, the bigger the hurdle. For JPM, I've heard this hurdle was summed up as _demonstrate a 1000x return on investment_. Blockchain (via cryptocurrency) provides a tailwind to the people already trying to drive "innovation" in 2 ways -- it gives these people two additional angles: 1. As much as banks dislike spending money they hate losing market share. The risk blockchain poses helps in the lobbying for "innovation" without being a central point. 2. Higher ups can have the opportunity to be seen as "innovative in blockchain" by having the main "innovation" have a pet blockchain PoC on the side (similar to [1]) that's only kinda taken seriously. While the first bite at the apple (the upgrade) may not be enough this second bite (PR about them using blockchain) may satisfy them. Does blockchain/cryptocurrency actually drive the discussion or make it into the final "innovation"? Probably not... today's gen 2 stacks just aren't good enough. Hopefully some gen 3's can change this in the next few years but that market still needs to be proven[2]. In the meantime, when dealing with a big bank's bureaucracy, every extra knot of tailwind helps. [1]: https://www.swift.com/news-events/press-releases/22-additional-global-banks-join-the-swift-gpi-blockchain-proof-of-concept https://www.swift.com/news-events/press-releases/22-addition... [2]: Disclosure: I was at JPM working on blockchain back when Gemini (now called Quorum) was first purposed and when Juno was the headline JPM blockchain project. I left to co-found one of these next-gen platforms: kadena.io
agorabinary 8y ago
It peaked not from a lack of demand but from hitting an inevitable scaling roadblock. Now the community is busy deploying a layer 2 (Lightning) to the Bitcoin mainnet that can offer transactions per second that exceed any financial system today, not to mention a whole host of breathtakingly innovative developments powered by this new layer. I understand the justifiable HN frustration at the prevalence of scams and overpromises that have plagued the blockchain (mainly ICO) world as of late. But the blockchain is getting better, and with developments that make SWIFT innovations seem trivial by comparison.
- Nursie 8y ago
  Lightning appears to be a set of hacks on top of a broken fundamental system. It's been touted as the saviour of the BTC ecosystem for some time now, but would require massive sums to be locked in its channels to be near functional, and last time I saw figures it was effectively incapable of routing as little as $60 and required participants to be online 24/7 or was vulnerable to counterparty attacks if not. It's really a bit of a joke.
  - bitreality 8y ago
    Your argument is so short-sighted. Yes, right now the Lightning Network is not ready for mainstream use. It may turn out that the Lightning Network and Bitcoin itself are obsolete in 5-10 years. But are you seriously betting against crypto-currency long term? Crypto-currency technology received billions of dollars in funding in 2017. Yes, plenty of that went to bullshit projects which have no chance at success, and probably have no intention to develop anything substantial. However, plenty of it also went towards hiring talented developers and creating projects focused on the next generation of crypto-currency. Up until 2017, the actual investment into blockchain projects was minimal. And yet, even when the market was chopping around between 2014 and 2016, and barely any money was invested, very important milestones were reached. Most notably, Ethereum was launched, and has set the foundation for putting applications on the blockchain. I don't think anyone argues that having full scale, working applications on the blockchain is a bad idea. They simply argue that the current applications are limited, and aren't working very well. As if the current state of crypto currency is static and will not improve in the next 10-20 years. The reality is that crypto-currency and blockchain never got any serious attention until 2013-14. And even then it was short-lived. Today every single person in tech knows about blockchain and crypto-currency. They all have their own opinion on it, but compared to just 5 years ago, it has come an incredibly long way. The technology will improve. It will improve at a much faster rate now, thanks to the bubble in 2017. These projects don't need to post quarterly earnings improvements. The developers don't need to follow a corporate timeline. You can't kill these projects. They will always improve incrementally, until at some point the technology is truly unrecognizable from what it is today. Go back and check a computer from 1950. I'm sure plenty of people back then were laughing at how ridiculous the concept was of owning a PC. Technology moves in a straight line, forward. And unless a competitor outpaces the improvement, then every day crypto currency gains on other forms of currency.
darawk 8y ago
It's not Bitcoin that pushed SWIFT to this, it's Ripple. https://ripple.com/ https://ripple.com/ Ripple's explicit goal has always been replacing SWIFT, and they started to get some real traction. I think it's pretty clear that they were motivated by cryptocurrency, they'd been stagnant for decades despite the fact that it would have been trivial for them to do what they're doing now.
- henrikschroder 8y ago
  So, Ripple is saying that SWIFT is slow to settle and unreliable. I wonder how much of that is because of SWIFT itself, or because of how slow and sucky the banks are that are using it? Anecdote: I have a sucky US bank, and a non-sucky Swedish bank. Last year I made a transfer from the US to Sweden, but it was after East Coast bank closing time, so it got scheduled for the next morning's batch transfer. Since I entered SWIFT details for my Swedish bank, I'm assuming the transfer went over SWIFT, but I don't actually know. Early in the morning the next day the transfer happened, and the money was immediately available to me in my Swedish bank account, because that bank doesn't suck. Three hours later I get an email from my US bank saying that they've processed the wire transfer, and I should maybe expect to see the money in my Swedish bank account in three business days... And I'm once again struck by how incompetent, slow, and sucky my US bank is. And I don't think the underlying money transfer technology can do much about that.
  - darawk 8y ago
    That all may be true. But SWIFT clearly thinks they need to innovate in this space, which means by their own admission they have room for improvement, particularly along the dimensions that Ripple was challenging them.
csomar 8y ago
I think you mean USD/BTC exchanged. Bitcoin did like 5bn USD of transactions yesterday (on the blockchain). It did x10-50 more on the peak. But it is certainly a much less reliable figure since you can transact with yourself.
momentmaker 8y ago
SWIFT is working with Chainlink to provide decentralized oracle data between SWIFT network between banks.

buckie 8y ago

SWITH gpi was announced in 2015, piloted in 2016, and incorporated a blockchain PoC in 2017[1]. While only SWIFT knows if cryptocurrency was part of the conversation at the start, I'd be surprised if it didn't at least come up very early on. In the context of how the politics of upgrading a bank's stack work, "driving" is the wrong word because in that context there are always people trying to drive "innovation". A better word is tailwind. Generally, banking tech is pretty crappy and good technologist can easily spot places where a big upgrade (aka "innovation") is warranted. The problem these people run into when lobbying for the upgrade is overcoming the hurdle of migration risk. The bigger the project, the bigger the hurdle. For JPM, I've heard this hurdle was summed up as _demonstrate a 1000x return on investment_. Blockchain (via cryptocurrency) provides a tailwind to the people already trying to drive "innovation" in 2 ways -- it gives these people two additional angles: 1. As much as banks dislike spending money they hate losing market share. The risk blockchain poses helps in the lobbying for "innovation" without being a central point. 2. Higher ups can have the opportunity to be seen as "innovative in blockchain" by having the main "innovation" have a pet blockchain PoC on the side (similar to [1]) that's only kinda taken seriously. While the first bite at the apple (the upgrade) may not be enough this second bite (PR about them using blockchain) may satisfy them. Does blockchain/cryptocurrency actually drive the discussion or make it into the final "innovation"? Probably not... today's gen 2 stacks just aren't good enough. Hopefully some gen 3's can change this in the next few years but that market still needs to be proven[2]. In the meantime, when dealing with a big bank's bureaucracy, every extra knot of tailwind helps. [1]: https://www.swift.com/news-events/press-releases/22-additional-global-banks-join-the-swift-gpi-blockchain-proof-of-concept https://www.swift.com/news-events/press-releases/22-addition... [2]: Disclosure: I was at JPM working on blockchain back when Gemini (now called Quorum) was first purposed and when Juno was the headline JPM blockchain project. I left to co-found one of these next-gen platforms: kadena.io

agorabinary 8y ago

It peaked not from a lack of demand but from hitting an inevitable scaling roadblock. Now the community is busy deploying a layer 2 (Lightning) to the Bitcoin mainnet that can offer transactions per second that exceed any financial system today, not to mention a whole host of breathtakingly innovative developments powered by this new layer. I understand the justifiable HN frustration at the prevalence of scams and overpromises that have plagued the blockchain (mainly ICO) world as of late. But the blockchain is getting better, and with developments that make SWIFT innovations seem trivial by comparison.

Nursie 8y ago
Lightning appears to be a set of hacks on top of a broken fundamental system. It's been touted as the saviour of the BTC ecosystem for some time now, but would require massive sums to be locked in its channels to be near functional, and last time I saw figures it was effectively incapable of routing as little as $60 and required participants to be online 24/7 or was vulnerable to counterparty attacks if not. It's really a bit of a joke.
- bitreality 8y ago
  Your argument is so short-sighted. Yes, right now the Lightning Network is not ready for mainstream use. It may turn out that the Lightning Network and Bitcoin itself are obsolete in 5-10 years. But are you seriously betting against crypto-currency long term? Crypto-currency technology received billions of dollars in funding in 2017. Yes, plenty of that went to bullshit projects which have no chance at success, and probably have no intention to develop anything substantial. However, plenty of it also went towards hiring talented developers and creating projects focused on the next generation of crypto-currency. Up until 2017, the actual investment into blockchain projects was minimal. And yet, even when the market was chopping around between 2014 and 2016, and barely any money was invested, very important milestones were reached. Most notably, Ethereum was launched, and has set the foundation for putting applications on the blockchain. I don't think anyone argues that having full scale, working applications on the blockchain is a bad idea. They simply argue that the current applications are limited, and aren't working very well. As if the current state of crypto currency is static and will not improve in the next 10-20 years. The reality is that crypto-currency and blockchain never got any serious attention until 2013-14. And even then it was short-lived. Today every single person in tech knows about blockchain and crypto-currency. They all have their own opinion on it, but compared to just 5 years ago, it has come an incredibly long way. The technology will improve. It will improve at a much faster rate now, thanks to the bubble in 2017. These projects don't need to post quarterly earnings improvements. The developers don't need to follow a corporate timeline. You can't kill these projects. They will always improve incrementally, until at some point the technology is truly unrecognizable from what it is today. Go back and check a computer from 1950. I'm sure plenty of people back then were laughing at how ridiculous the concept was of owning a PC. Technology moves in a straight line, forward. And unless a competitor outpaces the improvement, then every day crypto currency gains on other forms of currency.

darawk 8y ago

It's not Bitcoin that pushed SWIFT to this, it's Ripple. https://ripple.com/ https://ripple.com/ Ripple's explicit goal has always been replacing SWIFT, and they started to get some real traction. I think it's pretty clear that they were motivated by cryptocurrency, they'd been stagnant for decades despite the fact that it would have been trivial for them to do what they're doing now.

henrikschroder 8y ago
So, Ripple is saying that SWIFT is slow to settle and unreliable. I wonder how much of that is because of SWIFT itself, or because of how slow and sucky the banks are that are using it? Anecdote: I have a sucky US bank, and a non-sucky Swedish bank. Last year I made a transfer from the US to Sweden, but it was after East Coast bank closing time, so it got scheduled for the next morning's batch transfer. Since I entered SWIFT details for my Swedish bank, I'm assuming the transfer went over SWIFT, but I don't actually know. Early in the morning the next day the transfer happened, and the money was immediately available to me in my Swedish bank account, because that bank doesn't suck. Three hours later I get an email from my US bank saying that they've processed the wire transfer, and I should maybe expect to see the money in my Swedish bank account in three business days... And I'm once again struck by how incompetent, slow, and sucky my US bank is. And I don't think the underlying money transfer technology can do much about that.
- darawk 8y ago
  That all may be true. But SWIFT clearly thinks they need to innovate in this space, which means by their own admission they have room for improvement, particularly along the dimensions that Ripple was challenging them.

csomar 8y ago

I think you mean USD/BTC exchanged. Bitcoin did like 5bn USD of transactions yesterday (on the blockchain). It did x10-50 more on the peak. But it is certainly a much less reliable figure since you can transact with yourself.

momentmaker 8y ago

SWIFT is working with Chainlink to provide decentralized oracle data between SWIFT network between banks.