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IBM Reported To Be Developing Blockchain-Based Currency Transaction System
An anonymous reader writes: According to a Reuters source, IBM is working with the U.S. Federal Reserve and other central banks to develop a digital currency transaction system using the same blockchain technology that underpins Bitcoin — but which will deal with existing national currencies. The anonymous source says: "These coins will be part of the money supply...It's the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain," Despite vocal community protest about the potential "co-opting" of a geographically-neutral cryptocurrency in favor of a centrally-controlled distributed transaction ledger, the IBM project, if true, is only one among hundreds seeking to leverage the blockchain for new transaction systems.
The technology invented by a still anonymous genius, being developed to underpin major parts of the world economy. All that's left is to reveal that he is a sinister mastermind and the blockchain has a critical weakness that lets him, and him alone, control any transaction.
Gives me shivers. The future has arrived.
....why? Why would you do this? An obsession with linked lists? Because what we really need is a financial system that maxes out at 7 transactions/second and sucks down gobs of electricity, bandwidth and storage just to keep afloat.
... but if you don't like governments monopolising money supplies you can hardly turn around and insist that only bitcoin can monopolise the use of the block chain algorithm. Freedom is a 2 way street.
I wonder if this is tied into hall er ith technology for to completely eliminate another entire culture.
WTG IBM.
How are they going to get past the part that we TRUST the Feds to give us an electronic wallet without backdoors?
Step 1: Someone develops a cool open source technology
Step 2: IBM slaps their name on it
Step 3: IBM sells it to the government for millions of dollars
Step 4: Profit!
Call it what is - a distributed ledger.
- In Soviet Korea, only old people loose all their bases to Natalie Portman's petrified hot grits overlords.
Just concentrate on getting one right.
BTW I wouldn't trust IBM to collect my trash let alone with my crypto-currency.
Government: We really like the idea of being able to watch every currency transaction in real time...
IBM: We can sell you a bitcoin system.
Government: We don't really like terrorist money, or people mining free cash...
IBM: We can sell you an IBMcoin system. Please fill in the details on this rather large cheque.
Slashdot: where don knuth is an idiot because he cant grasp the awesome power of php
Combine the downsides of fiat money (unlimited printing by inner cabal) with the downsides of bitcoin (Everyone can see your transactions)
No, Actually how about you stay the hell away from me with this rubbish.
for bitcoin.
Ok l I know this is an unlikely scenario, but my main concern is that cash no longer becomes physical and can literally magically disappear if there was a global EMP that goes off, eg that Revolution tv series.
I don't see why "the community" would be upset about IBM developing a Blockchain-based system of their own to sell to governments. Did they really think the idea would never be used by anybody but crypto-anarchists?
And I thought that under the crypto-anarchist ethos, people were free to seek profit in any means they saw fit. Does that somehow not apply to large companies?
Unless they've figured out blockchain trimming, and how to vastly increase the transaction rate to traffic ratio, the blockchain simply isn't viable.
There's a reason all those 3rd party Bitcoin intermediaries popped up for 'off-chain' transactions (that solve all of Bitcoin's problems by removing Bitcoin from the equation).
While there may be some Bitcoin enthusiasts at IBM, it won't take very long for the rest of the organization to figure out the technology doesn't scale, isn't efficient, and has a short practical lifespan.
So true. If this takes off, I can see it as a way to achieve microtransactions, but if a few billion people suddenly start using it to send 1p to each other every time they read a newspaper article or whatnot, then I can see that blockchain becoming as large as all the computer storage in the entire world in short order.
It has to be trimmed in order to be practical, and I'm not sure how practical it would be without the blockchain. I wouldn't worry too much about the transaction speed, visa and mastercard happily handle a lot of transactions so this can be handled too (even if they need a better system than the current one).
Off the chain transactions are not a bad thing. They do solve to a large degree the problem of dust transactions.
Sure, they are not "official" and rely on a third party that may or may not be trustworthy, but the thing is... at any time you have the option to withdraw them and thus commit them to the blockchain.
There will be scams and people will risk losing money but in the end, legitimate organizations will prevail.
Another thing is that other coins with different blockchains also exist. You can use those to make smalller transactions. There does not need to be only one (blockchain) in the end. Some will be ideal for smaller transactions. Bitcoin will never be that. It will be the one to store value instead.
That said, I think the current blockchain technology is getting improved anyway. Something about more transactions per block or bigger transactions or something similar to reduce the current issues
Unless they've figured out blockchain trimming, and how to vastly increase the transaction rate to traffic ratio, the blockchain simply isn't viable.
There's a reason all those 3rd party Bitcoin intermediaries popped up for 'off-chain' transactions (that solve all of Bitcoin's problems by removing Bitcoin from the equation).
While there may be some Bitcoin enthusiasts at IBM, it won't take very long for the rest of the organization to figure out the technology doesn't scale, isn't efficient, and has a short practical lifespan.
Implementation details might well mean that the final result won't look like what you or I would call a proper blockchain. The article does make the outright claim that the central banks are essentially looking to put together a centralized, bank-controlled transaction and ledger system that would (implied) allow them to both execute and keep track of everyone's finances and all transactions.
This would represent a bit of a step up from what the credit card companies already do, but the banks have big pockets. If they succeed, this would give them a lot more control over the wealth of the world, and probably ensure that no decentralized power system ever survives infancy.
Assuming we drop the technical meaning of the term "block chain," do you honestly believe the banks are going to accept failure? Can you imagine anything actually preventing such an obvious power-grab?
Only allow one sided transactions that create new tokens to be signed by the reserve bank's key. Partition transactions into separate chains based on transaction hash. Validate the "official" blockchain in large data centers. Offer API access to submit or verify transactions without fetching the entire chain.
It really shouldn't be difficult to design the basic software changes to the bitcoin client. Scaling across a data center might be a bit more work though.
09F91102 no, 455FE104 nope, F190A1E8 uh-uh, 7A5F8A09 that's not it, C87294CE no. Ah! 452F6E403CDF10714E41DFAA257D313F.
The concept of having to have a copy of every transaction that ever occurred in order to participate in the system is ludicrous.