The whole point of Bitcoin was to form an alternative to banks so that they don’t become all powerful. If banks become better actors as a result, that’s good for Bitcoin.
Being Bitcoin entusiast, IMO blockchains provide no benefits for banks. Blockchain is actually very ineffective protocol/data structure, and the reason Bitcoin uses it is because it provides pseudo-anonymous network that removes need for trust. Also Blockchain can be trusted only combined with underlying unit of motivation and currency: Bitcoin (or other coins). Banks don't need pseudo-anonymity and can provide some level of trust. Protocols like Stellar / Ripple / Open Transactions and other non-blockchain digital accounting technologies are much better suited for banks.
This is one of the reasons why the Bitcoin Blockchain is not necessarily the best choice as a platform for non-Bitcoin purposes. That's why most of the interest from banks is in blockchain technology - i.e. they're looking at creating their own blockchains.
My question remains though, and here it is in another form: is there a compelling reason for banks to use a public blockchain rather than just use their own private network? I can’t figure out why they would use a cryptocoin-incentivized public blockchain, but maybe I just haven’t thought about it enough. Anyone have a good answer to this?
I never understood that sentiment. What exactly is bad about banks? Banks are a trusted middle-man that controls, insures and manages my transactions, and in contrast to arcane technological blockchain solutions is actually a legally liable entity.
I also don't understand how banks cost me more money than bitcoin. A bank transaction costs me very little to no money, a crypto-currency transaction is extremely expensive.
To be honest the banks do not know what to do with blockchains.
Their best properties and the banks' needs are not aligned. When you add in stuff the banks need like forcible retraction of transactions, and transaction fees, you have essentially destroyed blockchains. The moment a major bank releases production ready blockchain of their own it will be such that most will not get any real value out of it.
What they are doing (not what they are saying) is that they are trying to figure out how to hug the blockchain technology to death.
What? Banks are already subject to competition from other banks. And a blockchain is inefficient by design, any bank using that would have to charge more, not less.
SO will they deploy their own blockchains? I’ve always assumed that if banks rollout their own chain, this will render all other “official” chains useless.
Edit: not useless, but certainly now what people hope - so much valuable. Fiat is here to stay.
Interesting. Another way to read this is that trust between banks has deteriorated to the point where they feel that they need a blockchain -- a decentralized shared ledger -- to verify certain transactions with each other. Because otherwise a nice centralized, shared ledger is much easier to build, analyze, maintain, and secure.
What people like you who raise this argument forget is that the success of a blockchain is intertwined with the success of whatever currency/reward is granted to the miners who make the blockchain work. So if Bitcoin's blockchain is adopted by banks, then Bitcoin the currency will succeed. And if banks adopt another blockchain, then the currency of that blockchain will succeed.
It is literally impossible to have a functioning decentralized blockchain without a proper reward/currency built on it to incentivize miners to mine on it.
This is one of the reasons I dropped out of crypto for years, most of its supporters were completely delusional and tragically uninformed about actual banks.
I always considered two datapoints to be fulcral A) ease of use, which Bitcoin has never had and B) potential to be overtaken by an actual bank and twisted into whatever purposes it wanted due to the 51% error. That is, how hard would be it for JPMorgan or Deustche Bank to just buy 51% of Bitcoin and make it do whatever they wanted? I could never see the potential for either fact to be avoided, as much as the frothing Bitcoin-enthusiasts would like it to.
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