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A “universal” api for moving money between financial institutions that don’t have existing relationships would be extremely valuable and could unlock innovation

A “universal” api for moving money between financial institutions that don’t have existing relationships would be extremely valuable and could unlock innovation in everything from payments to mortgages. But the blockchain space has an extreme bias against the existing finance world. Frequently products in the space want to tear it down as they view it as predatory. This leaves us with the current situation, the crypto industry speed running the history of finance and a technology in search of a problem.

caycep 4y ago
How is it currently run? From my layperson experience, every time I do a wire transfer, I feel like I'm inputting data into a mainframe or something...
- belter 4y ago
  Well technically... [1] - "How Mainframes Keep The Financial Industry Up And Running" "...92 of the top 100 banks use the mainframe to provide banking services to customers, and other types of financial services companies depend on the mainframe, as well. Visa, for example, uses the mainframe to process billions of credit and debit card payments every year. According to some estimates, up to $3 trillion in daily commerce flows through mainframes..." [1] https://blog.share.org/Article/mainframe-matters-how-mainframes-keep-the-financial-industry-up-and-running https://blog.share.org/Article/mainframe-matters-how-mainfra...
  - hinkley 4y ago
    Technically technically, you're feeding data into a system whose purpose is the care and feeding of a mainframe. That veneer is pretty thin in places and so it tends to feel like you're talking to a mainframe even when you're talking to an arbitrator for the mainframe.
    - belter 4y ago
      Oh I see...you are here for an argument... https://youtu.be/ohDB5gbtaEQ https://youtu.be/ohDB5gbtaEQ
      - hinkley 4y ago
        Shut your festering gob, you tit! Your type makes me puke! You vacuous, toffee-nosed malodorous pervert!
        belter 4y ago
        I am sorry, but I am not allowed to argue on my free time... :-)
- bombcar 4y ago
  You basically are. https://www.fiscal.treasury.gov/ach/ https://www.fiscal.treasury.gov/ach/ and https://www.swift.com https://www.swift.com handle much of the US, and it's a system developed in the 70s (or earlier) and it works. It could be modernized and things like https://explore.fednow.org https://explore.fednow.org are trying to do that. But the problems involved are not things a blockchain would secure because there's a trusted intermediary which can just run a database.
bananapub 4y ago
I swear to god, half of the problem with cryptocurrency is Americans not understanding what a functional personal banking system looks like. The big American banks just never bothered to move beyond the 1970s, and so otherwise fairly well-informed Americans in tech assume you need some sort of completely mad system like "consume the power of Spain making a distributed merkel tree full of partial hash collisions" to make bank transfers work. in every other rich country, you just log in to your bank's web ui thing, click "SEND MONEY TO MY MUM", and then it sends it, for free, to your mum, with no risk of your mum being able to take more money, no random intermediary, no worry about if it actually gets there, no third party holding it in a non-bank cash account, no pre-authorisation, etc. you enter a bank identification number and an account number (and a name, usually, to avoid mistakes) and it just happens and it just works. in most countries this is quick, even, e.g. in the UK it's almost always < 5 seconds. FOR FREE. no blockchains, no multi-billion ponzi schemes, just a boring and simple service offered by every bank in the country. making the Fed make banks just introduce free, instant bank transfers could have saved the world tens of billions of dollars and apparently tens of billions of tons of greenhouse gases.
- hinkley 4y ago
  Snake oil comes around every couple of generations once the people who lived it are too feeble or too few to get the message out to the latest crop of people with enough income to grab the attention of con artists. These are in theory lessons that are meant to be passed along by the Public Education system but ours is pretty broken.
- mjr00 4y ago
  Exactly this, I'm in Canada and can transfer money to anyone in Canada (and maybe worldwide, never tried it though) for free, instantly. That's how most people pay rent up here. Most of the problems people perceive with the banking system are completely societal, 0% technical. If your bank doesn't let you send money instantly to your friend for free, that isn't because your bank needs a blockchain.
  - bananapub 4y ago
thwayunion 4y ago
> A “universal” api for moving money between financial institutions that don’t have existing relationships KYC is a feature, not a bug, so there has to be at least some sort of relationship even if it's via mutual registration with a third party. Also, modernization of banking systems, including inter-bank transfer, has been slowing happening in the background for the last decade. AFAIK no one is using pow, pos, or blockchains (except, maybe, just in the sense that traditional databases have many of the same desirable attributes as a blockchain). > could unlock innovation in everything from payments to mortgages. Innovation in mortgages didn't work out so well last time, and honestly the actual origination of a mortgage is one of the least painful and inefficient parts of real estate. When bitcoin launched we really did need innovation in payments. Apple Pay and Google Pay solved a lot of the problem, and the recent rise of "bank/lender as an api" startups popping up now solve a significant part of the rest of the problem.
JSavageOne 4y ago
The inadequacies of the traditional finance industry are not the "blockchain space"'s fault.

caycep 4y ago

How is it currently run? From my layperson experience, every time I do a wire transfer, I feel like I'm inputting data into a mainframe or something...

belter 4y ago
Well technically... [1] - "How Mainframes Keep The Financial Industry Up And Running" "...92 of the top 100 banks use the mainframe to provide banking services to customers, and other types of financial services companies depend on the mainframe, as well. Visa, for example, uses the mainframe to process billions of credit and debit card payments every year. According to some estimates, up to $3 trillion in daily commerce flows through mainframes..." [1] https://blog.share.org/Article/mainframe-matters-how-mainframes-keep-the-financial-industry-up-and-running https://blog.share.org/Article/mainframe-matters-how-mainfra...
- hinkley 4y ago
  Technically technically, you're feeding data into a system whose purpose is the care and feeding of a mainframe. That veneer is pretty thin in places and so it tends to feel like you're talking to a mainframe even when you're talking to an arbitrator for the mainframe.
  - belter 4y ago
    Oh I see...you are here for an argument... https://youtu.be/ohDB5gbtaEQ https://youtu.be/ohDB5gbtaEQ
    - hinkley 4y ago
      Shut your festering gob, you tit! Your type makes me puke! You vacuous, toffee-nosed malodorous pervert!
      - belter 4y ago
        I am sorry, but I am not allowed to argue on my free time... :-)
bombcar 4y ago
You basically are. https://www.fiscal.treasury.gov/ach/ https://www.fiscal.treasury.gov/ach/ and https://www.swift.com https://www.swift.com handle much of the US, and it's a system developed in the 70s (or earlier) and it works. It could be modernized and things like https://explore.fednow.org https://explore.fednow.org are trying to do that. But the problems involved are not things a blockchain would secure because there's a trusted intermediary which can just run a database.

bananapub 4y ago

I swear to god, half of the problem with cryptocurrency is Americans not understanding what a functional personal banking system looks like. The big American banks just never bothered to move beyond the 1970s, and so otherwise fairly well-informed Americans in tech assume you need some sort of completely mad system like "consume the power of Spain making a distributed merkel tree full of partial hash collisions" to make bank transfers work. in every other rich country, you just log in to your bank's web ui thing, click "SEND MONEY TO MY MUM", and then it sends it, for free, to your mum, with no risk of your mum being able to take more money, no random intermediary, no worry about if it actually gets there, no third party holding it in a non-bank cash account, no pre-authorisation, etc. you enter a bank identification number and an account number (and a name, usually, to avoid mistakes) and it just happens and it just works. in most countries this is quick, even, e.g. in the UK it's almost always < 5 seconds. FOR FREE. no blockchains, no multi-billion ponzi schemes, just a boring and simple service offered by every bank in the country. making the Fed make banks just introduce free, instant bank transfers could have saved the world tens of billions of dollars and apparently tens of billions of tons of greenhouse gases.

hinkley 4y ago
Snake oil comes around every couple of generations once the people who lived it are too feeble or too few to get the message out to the latest crop of people with enough income to grab the attention of con artists. These are in theory lessons that are meant to be passed along by the Public Education system but ours is pretty broken.
mjr00 4y ago
Exactly this, I'm in Canada and can transfer money to anyone in Canada (and maybe worldwide, never tried it though) for free, instantly. That's how most people pay rent up here. Most of the problems people perceive with the banking system are completely societal, 0% technical. If your bank doesn't let you send money instantly to your friend for free, that isn't because your bank needs a blockchain.
- bananapub 4y ago

thwayunion 4y ago

> A “universal” api for moving money between financial institutions that don’t have existing relationships KYC is a feature, not a bug, so there has to be at least some sort of relationship even if it's via mutual registration with a third party. Also, modernization of banking systems, including inter-bank transfer, has been slowing happening in the background for the last decade. AFAIK no one is using pow, pos, or blockchains (except, maybe, just in the sense that traditional databases have many of the same desirable attributes as a blockchain). > could unlock innovation in everything from payments to mortgages. Innovation in mortgages didn't work out so well last time, and honestly the actual origination of a mortgage is one of the least painful and inefficient parts of real estate. When bitcoin launched we really did need innovation in payments. Apple Pay and Google Pay solved a lot of the problem, and the recent rise of "bank/lender as an api" startups popping up now solve a significant part of the rest of the problem.

JSavageOne 4y ago

The inadequacies of the traditional finance industry are not the "blockchain space"'s fault.