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Nine of World's Biggest Banks Create Blockchain Partnership
An anonymous reader writes: Nine major banks, including Barclays, Goldman Sachs, Credit Suisse, and JP Morgan have teamed up to bring Bitcoin's blockchain technology to financial markets. "Over the past year, interest in blockchain technology has grown rapidly. It has already attracted significant investment from many major banks, which reckon it could save them money by making their operations faster, more efficient and more transparent." Leaving aside the question of whether banks actually want to become more transparent, they're funding a firm dedicated to running tests on how data can be shared and collected through the blockchain. "The blockchain works as a huge, decentralized ledger of every bitcoin transaction ever made that is verified and shared by a global network of computers and therefore is virtually tamper-proof. ... The data that can be secured using the technology is not restricted to bitcoin transactions. Two parties could use it to exchange any other information, within minutes and with no need for a third party to verify it."
You can delete all the spend output and keep only the unspend one. This is well documented. If I give 1$ to Bob, and Bob to Alice. The first transaction can be deleted safely if you know the transaction from Bob to Alice was ok.
"If you don't mine, you don't get new blocks."
Don't be silly. Mining was a side effect of the algorithmic design of bitcoin. For a completely new system the blocks could all be created in advance using random numbers and allocated on a need basis. If someone manages to guess an unreleased block and uses it then the police are called.
Now that it has survived several years of the intensive hacking attempts that a virtual currency would obviously be first to undergo, banks are starting to deem it ready to track other kinds of transactions.
True, but extending the resilience of the BTC blockchain to privately controlled uses, ignores one key point...
The current BTC mining network pushes 407.7 PH/s. The entire TOP500 supercomputer list can manage 363.3 PFLOPs/s. One hash takes 12697 FLOPs (officially - The exact number depends on how you calculate it, since hashing doesn't actually involve any floating point operations). That means we have approximately 14000x the computing power on this planet dedicated to Bitcoin mining as we do "real" supercomputing resources available.
The Bitcoin network has such high resilience to attack because you would need more computing horsepower than it has to compromise it (and even that doesn't mean you can arbitrarily rewrite the past, just that you can force a fork in the blockchain that you control). Assuming some half-assed clone by a handful of companies would have anywhere near the same level of security ignores almost everything that makes Bitcoin so secure.