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Do you think banks and other users of databases don't think about fraud and corruption? What do you think we have been doing in database research for the last

Do you think banks and other users of databases don't think about fraud and corruption? What do you think we have been doing in database research for the last 50 years? Do you know why a blockchain is useful? Its to enable fraud and corruption detection in a decentralized way. If you are centralized, blockchain is a stupid way to achieve these goals. I expect more from the WSJ. I expect more from Silicon Valley than this kind of shameless hype.

seibelj 7y ago
Core banking technology is from the 70s and hundreds of billions have been invested to keep it running, and upgrading the base later is essentially impossible. This is why everything in banking is super slow and fraud is still rampant. If you seriously think the banking system is the pinnacle of computer science you have rocks in your head.
- walterstucco 7y ago
  He's right though: Blockchain is (maybe) useful in a decentralised system between untrusted actors Banking (and spare parts market) are the exact opposite: centralised systems between trusted actors A bank would never accept a transaction from an unknown source, just like you wouldn't buy replacement parts for airplanes from someone you don't already know
- ceejayoz 7y ago
  I don't want the banking system to be the pinnacle of computer science. As with space probes, aircraft, nuclear power plants, etc., running on old tech that's had a lot of the quirks shaken out already is a plus. Side note: Saying "fraud is rampant" as an argument for blockchain solutions is pretty funny.
  - seibelj 7y ago
    It would be impossible for someone to steal cryptocurrency held in your own wallet, whereas bank accounts are routinely compromised and looted. If not blockchain, certainly there is room for improvement in our current system? Saying you like our current system despite its high fees, slowness, and numerous deficiencies and don’t want it improved is essentially saying you want progress to halt.
    - jacques_chester 7y ago
      > whereas bank accounts are routinely compromised and looted Which are also regularly reverted without fuss, regardless of whether you can work out who the attacker was. Banking is more than a ledger system. It's a ledger system and a massive web of institutional protections behind the ledger. By the time blockchain evolves the same norms, institutions, legal precedents, regulatory oversight and so on and so forth it just be a much-slower-than-a-real-database linked list.
    - ceejayoz 7y ago
      > It would be impossible for someone to steal cryptocurrency held in your own wallet That's a bizarre assertion. Both individuals and entire exchanges find their cryptocurrency wallets regularly compromised. > whereas bank accounts are routinely compromised and looted For which there are both legal and practical protections in place. If your card is compromised, your liability is strictly limited, and it's typically a fairly easy process to recover from. > Saying you like our current system despite its high fees, slowness, and numerous deficiencies and don’t want it improved is essentially saying you want progress to halt. This is the "We must do something. This is something. Therefore we must do it." fallacy. Banking can be improved evolutionarily without throwing out the whole system in favor of a fraud-ridden platform with scaling issues. It's already happening - transfers between banks in Europe are now near real-time via TIPS, for example. None of these improvements require blockchain, or even bleeding edge computer science of any kind.
    - wtmt 7y ago
      > It would be impossible for someone to steal cryptocurrency held in your own wallet That’s a false claim. Have you heard of people losing their wallets or about cold storage for cryptocurrency wallets to prevent others from stealing what one has? A cryptocurrency wallet is not anymore secure than the device it resides on and the security policies and practices used for the device.
  - tuesdayrain 7y ago
    > Side note: Saying "fraud is rampant" as an argument for blockchain solutions is pretty funny. Because many companies using a blockchain are frauds? Many fraudulent companies use the internet too, but you likely wouldn't laugh at an anti-fraud solution based on that.
- jacques_chester 7y ago
  > This is why everything in banking is super slow and fraud is still rampant. This depends very much on jurisdiction. The USA has slow banking and high fraud because of the clearance system and because of weak identification of account-holders. In Australia, the UK, Europe and elsewhere, clearance systems are either faster (same-day), or allow direct bank-to-bank clearance, or both. Australia has strict banking identity laws, making it very difficult to open fraudulent accounts.
- wtmt 7y ago
  Not sure what you mean by “everything in banking is super slow”. Maybe things are slow where you live. For money transfer (which is one part of banking), India has (had, for several years,) a few systems where money from any bank to any other bank in the country can be transferred in a matter of a few seconds or a few minutes depending on the transfer platform that the end user uses. There are no intermediaries in such transactions, like PayPal or something else. Nor are there any electronic systems that take a few days for transfer during working days.

seibelj 7y ago

Core banking technology is from the 70s and hundreds of billions have been invested to keep it running, and upgrading the base later is essentially impossible. This is why everything in banking is super slow and fraud is still rampant. If you seriously think the banking system is the pinnacle of computer science you have rocks in your head.

walterstucco 7y ago
He's right though: Blockchain is (maybe) useful in a decentralised system between untrusted actors Banking (and spare parts market) are the exact opposite: centralised systems between trusted actors A bank would never accept a transaction from an unknown source, just like you wouldn't buy replacement parts for airplanes from someone you don't already know
ceejayoz 7y ago
I don't want the banking system to be the pinnacle of computer science. As with space probes, aircraft, nuclear power plants, etc., running on old tech that's had a lot of the quirks shaken out already is a plus. Side note: Saying "fraud is rampant" as an argument for blockchain solutions is pretty funny.
- seibelj 7y ago
  It would be impossible for someone to steal cryptocurrency held in your own wallet, whereas bank accounts are routinely compromised and looted. If not blockchain, certainly there is room for improvement in our current system? Saying you like our current system despite its high fees, slowness, and numerous deficiencies and don’t want it improved is essentially saying you want progress to halt.
  - jacques_chester 7y ago
    > whereas bank accounts are routinely compromised and looted Which are also regularly reverted without fuss, regardless of whether you can work out who the attacker was. Banking is more than a ledger system. It's a ledger system and a massive web of institutional protections behind the ledger. By the time blockchain evolves the same norms, institutions, legal precedents, regulatory oversight and so on and so forth it just be a much-slower-than-a-real-database linked list.
  - ceejayoz 7y ago
    > It would be impossible for someone to steal cryptocurrency held in your own wallet That's a bizarre assertion. Both individuals and entire exchanges find their cryptocurrency wallets regularly compromised. > whereas bank accounts are routinely compromised and looted For which there are both legal and practical protections in place. If your card is compromised, your liability is strictly limited, and it's typically a fairly easy process to recover from. > Saying you like our current system despite its high fees, slowness, and numerous deficiencies and don’t want it improved is essentially saying you want progress to halt. This is the "We must do something. This is something. Therefore we must do it." fallacy. Banking can be improved evolutionarily without throwing out the whole system in favor of a fraud-ridden platform with scaling issues. It's already happening - transfers between banks in Europe are now near real-time via TIPS, for example. None of these improvements require blockchain, or even bleeding edge computer science of any kind.
  - wtmt 7y ago
    > It would be impossible for someone to steal cryptocurrency held in your own wallet That’s a false claim. Have you heard of people losing their wallets or about cold storage for cryptocurrency wallets to prevent others from stealing what one has? A cryptocurrency wallet is not anymore secure than the device it resides on and the security policies and practices used for the device.
- tuesdayrain 7y ago
  > Side note: Saying "fraud is rampant" as an argument for blockchain solutions is pretty funny. Because many companies using a blockchain are frauds? Many fraudulent companies use the internet too, but you likely wouldn't laugh at an anti-fraud solution based on that.
jacques_chester 7y ago
> This is why everything in banking is super slow and fraud is still rampant. This depends very much on jurisdiction. The USA has slow banking and high fraud because of the clearance system and because of weak identification of account-holders. In Australia, the UK, Europe and elsewhere, clearance systems are either faster (same-day), or allow direct bank-to-bank clearance, or both. Australia has strict banking identity laws, making it very difficult to open fraudulent accounts.
wtmt 7y ago
Not sure what you mean by “everything in banking is super slow”. Maybe things are slow where you live. For money transfer (which is one part of banking), India has (had, for several years,) a few systems where money from any bank to any other bank in the country can be transferred in a matter of a few seconds or a few minutes depending on the transfer platform that the end user uses. There are no intermediaries in such transactions, like PayPal or something else. Nor are there any electronic systems that take a few days for transfer during working days.