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This already exists. It’s called the DTCC and everybody uses it. https://en.m.wikipedia.org/wiki/Depository_Trust_%26_Clearing_Corporation https://en.m.wikiped

by koolba 8y ago

This already exists. It’s called the DTCC and everybody uses it. https://en.m.wikipedia.org/wiki/Depository_Trust_%26_Clearing_Corporation https://en.m.wikipedia.org/wiki/Depository_Trust_%26_Clearin...

darawk 8y ago
And that company is exactly what this tech. replaces. That company does not provide its services for free. This blockchain product does.
- 0xffff2 8y ago
  How does this product operate for free? Who's paying for the miners?
  - darawk 8y ago
    Sorry, there may be small fees paid to the miners. But those fees will presumably be dramatically less than this current company charges.
    - deleted 8y ago
      [deleted]
    - hcknwscommenter 8y ago
      You are putting a lot of weight on "presumably." Someone has to pay for all that mining. Or, you know, skip the mining and your costs should be lower.
      - DennisP 8y ago
        They do skip the mining. Mining defends against Sybil attacks, which you don't have to worry about if you know who all the participants are.
  - scottlocklin 8y ago
    You don't mine in a permissioned system like quorum. The CPU load is minimal, and when running the quorum clients, you are basically just checking to make sure everyone in the system agrees on the transactions. If someone tries to cheat (or spam or whatever), you kick them out.
    - simias 8y ago
      But then we're back to square one, aren't you basically describing a distributed (but still perfetly "trustful") database? Isn't that effectively what this DTCC provides? What in this allows JPMorgan to provide the same service for free? Is it really technical innovation or is it just a different business model? Wouldn't they be able to do the same thing without using anything cryptocurrency/blockchain related? I feel like I'm missing something obvious but I don't see what it is.
      - scottlocklin 8y ago
        A blockchain is a distributed non trustful database with a method for resolving disputes built in. Roughly speaking in something like quorum, everyone checks everyone else's work, and the majority consensus is ground truth. DTCC requires a trusted third party to administer the database. Quorum doesn't. Quorum could presumably also replace intra-bank transactions as well (instead of maintaining some other kind of database). I guess the missing piece that seems to break people's brains; the ledger in the distributed database represents a dollar amount (in the case of quorum's dollar thing) and it has money-like rules, unlike, say, postgres which ultimately relies on some other piece of software to make ledger like transactions.
      - dkoston 8y ago
        Unless I am mistaken, DTCC doesn’t provide any trust for internal account balances at JPMC. It only provides trust for the details of transfers. These tokens provide trust before and after transfers. The tokens themselves actually provide no trust during transfers and the transfers are only allowed by trusted parties as a result. Also, DTCC only handles securities not currency so this doesn’t exist at all. What actually you should be arguing is that the JP coin and the DTCC need to be combined as they each only provide trust in a certain part of the ecosystem.
  - pjc50 8y ago
    Permissioned blockchain generally doesn't have wasteful mining because all the participants are known. So the nodes just end up signing transactions. Double spend attempts can then be prosecuted.
- koolba 8y ago
  > And that company is exactly what this tech. replaces. That company does not provide its services for free. This blockchain product does. There’s no such thing as “free”. You’re either paying directly or indirectly. The DTCC is owned by its member organizations so it does not have a direct profit incentive anyway. I highly suggest reading more on the topic and the problems it’s meant to solve before pitching “But blockchain!” as a solution.
  - darawk 8y ago
    It doesn't need to have a profit motive to cost more. It's costs are what cost more.
    - creeble 8y ago
      But there is no reason for it to cost more than a private blockchain solution.
      - yholio 8y ago
        Sure there is, simply by virtue of being the only solution available. All of a sudden, a simple database becomes a sprawling corporation with a multimillionaire board of directors, waging political war among themselves for resources, power and an ever larger number of underlings. The private sector is not magically superior to a state bureaucracy, without any competition or political pressure to reform it can act even worse.
        root_axis 8y ago
        > a sprawling corporation with a multimillionaire board of directors, waging political war among themselves for resources, power and an ever larger number of underlings. A blockchain does not get rid of those things.
        darawk 8y ago
        Erm, yes it does. DTCC has a board of directors. It is a company. This blockchain eliminates that. Literally.
- Kluny 8y ago
  It's not going to be free once they finish paying the army of developers each bank will have to keep on staff to manage it.
  - darawk 8y ago
    You mean like the army of developers required to run an ethereum node?
    - vinniejames 8y ago
      Or the fact that their coin / Quorum IS Ethereum, so most of the work will be done for free by core devs
      - darawk 8y ago
        You seem to be missing the point. Operating this blockchain is nearly free. Building it out is a capital cost. Once its built, its ongoing expenses should be low.
        dboreham 8y ago
        You two were actually saying the same thing.
        vinniejames 8y ago
        There's nothing to built... 1. `git clone ethereum jpmorgancoin` 2. profit
DennisP 8y ago
Maybe JP Morgan thinks it's possible to improve on the DTCC. Your link describes some controversy over their handling of naked shorts, for example. Or maybe the new system would be cheaper, or JP Morgan wants to implement new features themselves, without having to convince everybody to trust JP Morgan to track their money.
jondubois 8y ago
A cryptocurrency is valuable because it is the closest thing that you can get to an absolute source of truth. The more participants you have in the network, the more difficult it is to change the rules and tamper with the records. Nobody can devalue your money; the rules are laid out up-front and only you have the key to transfer your money. Most people today store their wealth in either a national fiat currency or instruments which derive their value from it. Fiat currency is controlled by governments; new money enters the fiat system in ways that are opaque to the average person. The fiat system is not opaque to the global financial elites however; through social connections and access to inside information, the elites have a pretty good idea about how to predictably use the fiat system to maintain an unfair advantage. The fiat money that you hold is being constantly diluted without your knowledge; costs of living are going up, opportunities to start your own business are disappearing and you are increasingly forced to work for corporations which are controlled by the financial elites. There is a reason why corporations are so inefficient; they can afford to be - They're not in the business of creating value. The reason that corporations make so much money is because they've monopolised all the channels through which new money flows into the economy. For example, companies like Oracle have monopolised government contracts (which is just one of many financial channels through which money enters the system); most of that money is poorly spent; the company essentially uses the profits to buy back their stock to make their shareholders and executives richer. You know that this is what's happening because very few software developers use Oracle products today and yet the company's stock price has kept going up. Their license fees are ridiculous (according to some sources, Oracle sell licenses for software which costs over $40K per cpu core annually). See https://en.wikipedia.org/wiki/List_of_failed_and_overbudget_custom_software_projects https://en.wikipedia.org/wiki/List_of_failed_and_overbudget_... ^ This list is made even more scary by the fact that it's not a complete list. Is it an accident that the list is so far from being complete? For example, it's not difficult to find massive failed projects which are not listed there. For example https://en.wikipedia.org/wiki/INCIS https://en.wikipedia.org/wiki/INCIS
- kurtisc 8y ago
  So what happens when a mistake happens on the blockchain? >The fiat money that you hold is being constantly diluted without your knowledge I think most people here are aware of inflation
bhaak 8y ago
Quoting Wikipedia: "Several companies have sued the DTCC, without success, over delivery failures in their stocks, alleging culpability for naked short selling. [...] Critics blame DTCC, noting that it is the organization in charge of the system where it happens, alleging that DTCC turns a blind eye to the problem, and complaining that the Securities and Exchange Commission (SEC) has not taken sufficient action against naked shorting" Doesn't sound that trustless to me. With a decentralized setup as in Quorum at least everybody can calculate how much they have to trust the miners. If your company has miners of their own, you are part of the whole system and not just using a third party service.
- askmike 8y ago
  Most quorum implementations I have seen don't use mining for consensus. Out of the box you can choose between these consensus algorithms: https://github.com/jpmorganchase/quorum/wiki/Quorum-Consensus https://github.com/jpmorganchase/quorum/wiki/Quorum-Consensu...
  - bhaak 8y ago
    Thanks for the link. I knew there were other consensus algorithms possible but I didn't know of any specific example. The main point still stands though, the different consensus algorithm allow you more insight than a simple centralized DB that is just a black box.
    - askmike 8y ago
      I agree very much. I have worked on quorum based blockchain systems for bank consortiums in the past.
as300 8y ago
The thing is that it can take days for a transaction between two different regional banks to clear. Whereas with the solution they're proposing, I'm guessing it'd take much less time than that. Many people are trying to solve this problem (see: Corda, XRP)

by koolba 8y ago

darawk 8y ago

And that company is exactly what this tech. replaces. That company does not provide its services for free. This blockchain product does.

0xffff2 8y ago
How does this product operate for free? Who's paying for the miners?
- darawk 8y ago
  Sorry, there may be small fees paid to the miners. But those fees will presumably be dramatically less than this current company charges.
  - deleted 8y ago
    [deleted]
  - hcknwscommenter 8y ago
    You are putting a lot of weight on "presumably." Someone has to pay for all that mining. Or, you know, skip the mining and your costs should be lower.
    - DennisP 8y ago
      They do skip the mining. Mining defends against Sybil attacks, which you don't have to worry about if you know who all the participants are.
- scottlocklin 8y ago
  You don't mine in a permissioned system like quorum. The CPU load is minimal, and when running the quorum clients, you are basically just checking to make sure everyone in the system agrees on the transactions. If someone tries to cheat (or spam or whatever), you kick them out.
  - simias 8y ago
    But then we're back to square one, aren't you basically describing a distributed (but still perfetly "trustful") database? Isn't that effectively what this DTCC provides? What in this allows JPMorgan to provide the same service for free? Is it really technical innovation or is it just a different business model? Wouldn't they be able to do the same thing without using anything cryptocurrency/blockchain related? I feel like I'm missing something obvious but I don't see what it is.
    - scottlocklin 8y ago
      A blockchain is a distributed non trustful database with a method for resolving disputes built in. Roughly speaking in something like quorum, everyone checks everyone else's work, and the majority consensus is ground truth. DTCC requires a trusted third party to administer the database. Quorum doesn't. Quorum could presumably also replace intra-bank transactions as well (instead of maintaining some other kind of database). I guess the missing piece that seems to break people's brains; the ledger in the distributed database represents a dollar amount (in the case of quorum's dollar thing) and it has money-like rules, unlike, say, postgres which ultimately relies on some other piece of software to make ledger like transactions.
    - dkoston 8y ago
      Unless I am mistaken, DTCC doesn’t provide any trust for internal account balances at JPMC. It only provides trust for the details of transfers. These tokens provide trust before and after transfers. The tokens themselves actually provide no trust during transfers and the transfers are only allowed by trusted parties as a result. Also, DTCC only handles securities not currency so this doesn’t exist at all. What actually you should be arguing is that the JP coin and the DTCC need to be combined as they each only provide trust in a certain part of the ecosystem.
- pjc50 8y ago
  Permissioned blockchain generally doesn't have wasteful mining because all the participants are known. So the nodes just end up signing transactions. Double spend attempts can then be prosecuted.
koolba 8y ago
> And that company is exactly what this tech. replaces. That company does not provide its services for free. This blockchain product does. There’s no such thing as “free”. You’re either paying directly or indirectly. The DTCC is owned by its member organizations so it does not have a direct profit incentive anyway. I highly suggest reading more on the topic and the problems it’s meant to solve before pitching “But blockchain!” as a solution.
- darawk 8y ago
  It doesn't need to have a profit motive to cost more. It's costs are what cost more.
  - creeble 8y ago
    But there is no reason for it to cost more than a private blockchain solution.
    - yholio 8y ago
      Sure there is, simply by virtue of being the only solution available. All of a sudden, a simple database becomes a sprawling corporation with a multimillionaire board of directors, waging political war among themselves for resources, power and an ever larger number of underlings. The private sector is not magically superior to a state bureaucracy, without any competition or political pressure to reform it can act even worse.
      - root_axis 8y ago
        > a sprawling corporation with a multimillionaire board of directors, waging political war among themselves for resources, power and an ever larger number of underlings. A blockchain does not get rid of those things.
        darawk 8y ago
        Erm, yes it does. DTCC has a board of directors. It is a company. This blockchain eliminates that. Literally.
Kluny 8y ago
It's not going to be free once they finish paying the army of developers each bank will have to keep on staff to manage it.
- darawk 8y ago
  You mean like the army of developers required to run an ethereum node?
  - vinniejames 8y ago
    Or the fact that their coin / Quorum IS Ethereum, so most of the work will be done for free by core devs
    - darawk 8y ago
      You seem to be missing the point. Operating this blockchain is nearly free. Building it out is a capital cost. Once its built, its ongoing expenses should be low.
      - dboreham 8y ago
        You two were actually saying the same thing.
      - vinniejames 8y ago
        There's nothing to built... 1. `git clone ethereum jpmorgancoin` 2. profit

DennisP 8y ago

Maybe JP Morgan thinks it's possible to improve on the DTCC. Your link describes some controversy over their handling of naked shorts, for example. Or maybe the new system would be cheaper, or JP Morgan wants to implement new features themselves, without having to convince everybody to trust JP Morgan to track their money.

jondubois 8y ago

A cryptocurrency is valuable because it is the closest thing that you can get to an absolute source of truth. The more participants you have in the network, the more difficult it is to change the rules and tamper with the records. Nobody can devalue your money; the rules are laid out up-front and only you have the key to transfer your money. Most people today store their wealth in either a national fiat currency or instruments which derive their value from it. Fiat currency is controlled by governments; new money enters the fiat system in ways that are opaque to the average person. The fiat system is not opaque to the global financial elites however; through social connections and access to inside information, the elites have a pretty good idea about how to predictably use the fiat system to maintain an unfair advantage. The fiat money that you hold is being constantly diluted without your knowledge; costs of living are going up, opportunities to start your own business are disappearing and you are increasingly forced to work for corporations which are controlled by the financial elites. There is a reason why corporations are so inefficient; they can afford to be - They're not in the business of creating value. The reason that corporations make so much money is because they've monopolised all the channels through which new money flows into the economy. For example, companies like Oracle have monopolised government contracts (which is just one of many financial channels through which money enters the system); most of that money is poorly spent; the company essentially uses the profits to buy back their stock to make their shareholders and executives richer. You know that this is what's happening because very few software developers use Oracle products today and yet the company's stock price has kept going up. Their license fees are ridiculous (according to some sources, Oracle sell licenses for software which costs over $40K per cpu core annually). See https://en.wikipedia.org/wiki/List_of_failed_and_overbudget_custom_software_projects https://en.wikipedia.org/wiki/List_of_failed_and_overbudget_... ^ This list is made even more scary by the fact that it's not a complete list. Is it an accident that the list is so far from being complete? For example, it's not difficult to find massive failed projects which are not listed there. For example https://en.wikipedia.org/wiki/INCIS https://en.wikipedia.org/wiki/INCIS

kurtisc 8y ago
So what happens when a mistake happens on the blockchain? >The fiat money that you hold is being constantly diluted without your knowledge I think most people here are aware of inflation

bhaak 8y ago

Quoting Wikipedia: "Several companies have sued the DTCC, without success, over delivery failures in their stocks, alleging culpability for naked short selling. [...] Critics blame DTCC, noting that it is the organization in charge of the system where it happens, alleging that DTCC turns a blind eye to the problem, and complaining that the Securities and Exchange Commission (SEC) has not taken sufficient action against naked shorting" Doesn't sound that trustless to me. With a decentralized setup as in Quorum at least everybody can calculate how much they have to trust the miners. If your company has miners of their own, you are part of the whole system and not just using a third party service.

askmike 8y ago
Most quorum implementations I have seen don't use mining for consensus. Out of the box you can choose between these consensus algorithms: https://github.com/jpmorganchase/quorum/wiki/Quorum-Consensus https://github.com/jpmorganchase/quorum/wiki/Quorum-Consensu...
- bhaak 8y ago
  Thanks for the link. I knew there were other consensus algorithms possible but I didn't know of any specific example. The main point still stands though, the different consensus algorithm allow you more insight than a simple centralized DB that is just a black box.
  - askmike 8y ago
    I agree very much. I have worked on quorum based blockchain systems for bank consortiums in the past.

as300 8y ago

The thing is that it can take days for a transaction between two different regional banks to clear. Whereas with the solution they're proposing, I'm guessing it'd take much less time than that. Many people are trying to solve this problem (see: Corda, XRP)