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."

Comments

I told you so

[Applehu Akbar]

"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."

The best feature of Bitcoin has been its use as a proving ground for blockchain technology. 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.

Re:I told you so

[pla]

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.

Open or Close Blockchain

[JcMorin]

Let me guess: they want to copy Bitcoin but not everyone can participate (only approved banks). They want to copy bitcoin but not everyone can mine (only major banks). They want to copy bitcoin but not everyone can see all transactions (filter to your own transactions only?). Yeap, it will end up with a close system in a centralized database just like they have right now.

Bitcoin is about losing control to anyone and open access.

• - If not everyone can participate they will remove the consensus code and add some sort of centralized authentication.

• - If not everyone can mine it they will again have some sort of centralized authentication.

• - If they remove the mining entirely, the currency creation will be either pre-mined with some banks at start or distributed based on a some specific rule that will favor the big starting banks. Having no mining will also remove all incentive to validate the transaction, make the whole thing weak and prone to double spend attack.

• - If they don't want everyone to see all the transactions, it will be close network with restricted access. A single bank could leaked out the entire blockchain, I'm not sure they really want to go in that direction!

Re:Open or Close Blockchain

[known_coward_69]

this isn't about mining anything. it's about doing financial transactions without Visa, Mastercard or pesky central banks having to be paid to verify transactions