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Bitcoin Technology Piques Interest on Wall Street

nytimes.com

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Re: Bitcoin Technology Piques Interest on Wall Street

#21

Post by brighton36 »

Animats wrote: post #15

This has nothing to do with Bitcoin. The interest is in distributed ledgers. It's a way to do a distributed clearing house. When twenty or so mutually mistrustful financial firms maintain a blockchain between them, they can have a ledger that no single party, or less than a majority of the parties, can tamper with. This doesn't require Bitcoins, a currency, or mining. It's a way to solve a problem that currently requ…

Permissioned ledgers haven't actually been deployed anywhere. The entirety of this technology is marketing hype, without much of a definition past "Cure's whatever ails your ledger"

Re: Bitcoin Technology Piques Interest on Wall Street

#22

Post by brighton36 »

cassetti wrote: post #8
mikeyouse wrote: post #2

I can't believe that there's any possibility of banks doing anything of value on the Bitcoin blockchain when they could easily coopt the blockchain tech and set up trusted miners. The public immutable ledger with full transaction history is obviously interesting to Wall St. but what are the chances any of these banks will trust anything of value to the current ideological devs of a ~$3B commodity controlled entirely…

A couple of weeks ago I talked to the CEO of startup in NYC building a proprietary blockchain-like protocol/product for banks. According to him if a bank interacts with the bitcoin blockchain in any way (mining and/or posting transactions), they are violating a host of AML and KYC regulations because they do not know the identity of other players on the network. Apparently the claim could be made that the bank is col…

If it's "bitcoin-like" then it will be similarly used as bitcoin. The efficiency blockchains offer is regulatory arbitrage. If the proposed system is not-actually-bitcoin-like, and doesn't circumvent regulations, it's hard to see what efficiency is being offered, over a centralized system.

I have no idea if bitcoin is useful for banks. What does seem fairly certain is that these "Bitcoin without the bad guys" pitches are pretty flimsy.

Re: Bitcoin Technology Piques Interest on Wall Street

#23

Post by brighton36 »

tcbawo wrote: post #14

This has been posted here before, but many financial firms are interested in a block chain concept (not necessarily bitcoin) for processing settlements. I imagine it will be the same clearing houses and broker-dealers of today, except that counter-party risk is reduced.

The only efficiency that blockchains offer is making KYC and regulatory encumberances redundant. In every other way, blockchains are inferior to incumbent systems. What will likely happen is that the regulatory hurdles that make incumbent systems inefficient will be reduced a bit, under the pretense that doing so is better compromise than using the alternative (bitcoin).

Re: Bitcoin Technology Piques Interest on Wall Street

#24

Post by brighton36 »

1971genocide wrote: post #7

Bitcoin's underlying problem as a monetary system is the same that exists with commodity based currencies like gold. Almost all economical models that exists out there always reach a point of indeterminacy. What happens when there is massive inequality in the bitcoin world ? Money has one important purpose : 1) Efficient allocation of labor for society's benefit. To achieve it we need to establish something that can…

Blockchains won't be efficient at voting for the simple reason that full transparency enables vote buying.

Re: Bitcoin Technology Piques Interest on Wall Street

#25

Post by icebraining »

oh_sigh wrote: post #9
icebraining wrote: post #6

Earlier quoted context omitted.

Yes, but they could start their own closed blockchain instead of mining for Bitcoin.

Or they could just maintain their own ledgers for 1 billionth the computational cost.

Bitcoin by itself doesn't actually need much energy - it could easy run in a single server. The reason it uses so much now is because so many miners have joined, so the software increased the computational difficulty to keep generating 1 block every 10m.

If you run the bitcoin daemon in "regression test" mode, which creates a private, disconnected blockchain, it can actually generate ~200 blocks per minute using just a single CPU.

Re: Bitcoin Technology Piques Interest on Wall Street

#26

Post by brighton36 »

icebraining wrote: post #6
Hermel wrote: post #5

Earlier quoted context omitted.

Not today, but maybe tomorrow if banks start mining themselves and dedicate developers to the project.

Yes, but they could start their own closed blockchain instead of mining for Bitcoin.

Don't they do that already? What is a 'closed blockchain' if not a sql server? The only value a blockchain has is as a public resource.

Re: Bitcoin Technology Piques Interest on Wall Street

#27

Post by stcredzero »

yc1010 wrote: post #12
stcredzero wrote: post #11

Earlier quoted context omitted.

Yes, but if the banks set up their own Bitcoin-like blockchain but with an added certificate authority, then they'd be putting their money where their mouth is, and then you'd be the one looking like you're overstating your case. As a media skeptic, the 1st suspect is the one who is ascribing motivations to other parties/groups with no evidence. This goes double when something "technical" overlooks technical alternat…

Nothing stopping them from doing so, tho the use of a blockchain in such a "centralized" context is silly and an overkill when they can use a normal database with better/faster results especially if they already know+trust each other.

so, tho the use of a blockchain in such a "centralized" context is silly

As you yourself noted, if a dozen banks got together to do this, it wouldn't be any more centralized than what we have now!

Re: Bitcoin Technology Piques Interest on Wall Street

#28

Post by icebraining »

brighton36 wrote: post #26
icebraining wrote: post #6

Earlier quoted context omitted.

Yes, but they could start their own closed blockchain instead of mining for Bitcoin.

Don't they do that already? What is a 'closed blockchain' if not a sql server? The only value a blockchain has is as a public resource.

A closed blockchain is still distributed (just not open to everyone), and still has different nodes checking up on each other, while an SQL server is a single point of potential fraud.

Re: Bitcoin Technology Piques Interest on Wall Street

#29

Post by jchrisa »

1971genocide wrote: post #7

Bitcoin's underlying problem as a monetary system is the same that exists with commodity based currencies like gold. Almost all economical models that exists out there always reach a point of indeterminacy. What happens when there is massive inequality in the bitcoin world ? Money has one important purpose : 1) Efficient allocation of labor for society's benefit. To achieve it we need to establish something that can…

The problem is that it's not decentralized enough. Bitcoin is still scarcity economics when we are ready for abundance.

Re: Bitcoin Technology Piques Interest on Wall Street

#30

Post by CyberDildonics »

mikeyouse wrote: post #2

I can't believe that there's any possibility of banks doing anything of value on the Bitcoin blockchain when they could easily coopt the blockchain tech and set up trusted miners. The public immutable ledger with full transaction history is obviously interesting to Wall St. but what are the chances any of these banks will trust anything of value to the current ideological devs of a ~$3B commodity controlled entirely…

You seem pretty intent on posting strawman arguments and fud in every bitcoin related thread.

You do realize that it is basically impossible for a miner to roll back last month's transactions and that no such thing has happened at all, right?

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