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Why do two institutions need a blockchain for transacting only between themselves? They’re banks. They have lots of agreements and lawyers. They already trust
by MBCook 4y ago
Why do two institutions need a blockchain for transacting only between themselves?
They’re banks. They have lots of agreements and lawyers. They already trust eachother. And there’s no 3rd party involved.
I’d be surprised if there was an actual blockchain involved instead of spinning a simple log as a blockchain for hype.
- matthewdgreen 4y agoPresumably whatever 1970s tech they were using previously was creaky and needed to be replaced. It probably had long settlement times. You’re correct that if two extremely trusted parties are going to handle all settlement, you can just have one party run a centralized database. But this gets more challenging when you expand from one party to dozens, and the trust relationships get less clear. Since you’re building a new platform anyway, you might as well build a database that’s replicated and decentralized and doesn’t require trusting any single party for availability and correctness, at which point you’ll either use a blockchain or something functionally equivalent.