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IBM and Linux Foundation To Create Blockchain For Major Financial Institutions (thestack.com)
An anonymous reader writes: Following initial news of the project in March, IBM, under the supervision of the Linux Foundation and in partnership with several major tech interests including Fujitsu, has announced today that it will lead development of a new blockchain — a financial transaction ledger fashioned after the Bitcoin model. Provisionally called Open Ledger, the new initiative is aimed specifically at financial transactions, and though it will be open source in terms of development, but 'semi-private' in operation. Those with an interest in the project are said to include JP Morgan, Wells Fargo and the Bank of England. IBM VP Jerry Cuomo, who has discussed the project with Fortune and Wired, commented "The current blockchain is a great design pattern...Now, how do we make that real for business? What are the key attributes needed to make that happen? That's what this organization is about."
> Bitcoin is already real for business.
Bitcoin is real for SOME businesses who operate online. It's not feasible for anyone else, and it is most DEFINITELY not feasible for everyone.
There's just so MANY reasons why bitcoin has issues. I'll list a few, and maybe someone can pop in with more.
1- Bitcoin transactions can take hours to complete, and in no cases do they complete fast. The global transactions per second possible is really low (like less than 20), compared to thousands for credit cards / etc. In *practice* the total transactions per second possible now is less than five.
2- To speed up the transactions to even the theoretical max would require a bunch of random people to agree on standards, but with a low limit they find that people will "bribe" the system by enclosing a transaction fee into their transaction. This moves the transaction higher in the priority (because the processors stand to get some payment). That's not inherently awful, but it means that any time someone wants to speed stuff up for everyone, the people doing the processing stand to lose money- so, of course, they don't want this to happen.
3- Everyone who touches this stuff seems to turn into some kind of thief. It's like dark magic. Feds bust DPR, one of them steals his shit. Mt Gox takes off with everyone's cash, or a hacker does, or who knows, the point is it is gone. It's all gone, every time. Put bitcoins in this jar, I have a plan. Oops, the plan was to take the jar.
4- The people sound absolutely insane. I'm a libertarian, and they sound insane to me- imagine how all this screed sounds to someone who isn't even of that persuasion.
5- A ton of bitcoin are locked up by the person or people who premined it, who may or may not be the businessman who got investigated, or who knows. The whole thing is shrouded in ludicrous amounts of secrecy.
Bitcoin has a niche for now, but this is very volatile and backed by nothing except scarcity. It exists solely because there's no good way to transfer money anonymously without meeting in person- literally any government in the world could tank the price by offering a way to transfer their currency anonymously.
So it's a currency that takes a premium above the market share to buy, takes a premium to trade with, takes minutes at BEST to confirm a transaction, usually involves a transaction hit on the sell, and involves a fee to pay to the miners on any transaction- and everyone involved at the high level is both fully invested and fully delusional. Oh, and the price is ludicrously volatile. And everyone who you trust immediately turns into bats and flies away.
This isn't a cryptocurrency. It's a securely signed ledger for the transactions the banks are already doing. Many times each day, Wells Fargo sends money to Bank of America, BOA borrows from Chase, Chase pays back a loan from Barclays, Barclays pays Wells Fargo (completing the circle) , etc. There's a lot of paper work, computer processing, and transaction costs and delays in moving that money around the circle. A block chain might, in some cases, might be a more efficient or effective way to record some of those transactions rather than the current computer system.
> people don't want banks in control of money
The line at the bank, the people standing there waiting to hand their money to the bank, suggests otherwise. Regardless, this article is about the banks using a blockchain to record transactions among themselves . Surely the banks want the banks to be in control of their own monetary transactions.
So if it's semi-private, it probably means regular people won't be able to mine, which means that corrupted banks will try to take over
No, that is not what this is about. This is not a takeover of bitcoin by the banks. This is about using a separate semi-private blockchain to verify non-bitcoin transactions. Currently, financial transactions, such as stock or bond sales, can take several days to clear, and involve significant transaction costs. By using a blockchain, these transactions could be verified in seconds, and at lower cost.
ACH:
Cheap
slow
US only. (The Eurozone has something similar)
The Eurozone calls them "wire transfers" and they are not expensive--expensive wires are a US thing.
Whenever I explain that the US still largely runs on checks to my European and Chinese colleagues, they look at me like I have three heads. When I explain ACH to them (which still runs on checks) they think I'm either full of shit, or that the guys who designed our banking systems are fucking lunatics.
What part of "shall not be infringed" is so hard to understand?