Banks Adopting Blockchain 'Dramatically Faster' Than Expected (reuters.com)

Banks and other financial institutions are adopting blockchain technology "dramatically faster" than initially expected, with 15 percent of top global banks intending to roll out full-scale, commercial blockchain products in 2017, IBM said on Wednesday. Reuters reports: The technology company said 65 percent of banks expected to have blockchain projects in production in three years' time, with larger banks -- those with more than 100,000 employees -- leading the charge. IBM, whose findings were based on a survey of 200 banks, said the areas most commonly identified by lenders as ripe for blockchain-based innovation were clearing and settlement, wholesale payments, equity and debt issuance and reference data. Blockchain, which originates from digital currency bitcoin, works as an electronic transaction-processing and record-keeping system that allows all parties to track information through a secure network, with no need for third-party verification.

Comments

Re:Two days after a blockchain editing was announc

[PRMan]

An editable blockchain is not a blockchain.

Re:Expediency of transactions?

[Hans Lehmann]

Electronic transfers of course only take milliseconds, but what's the point of banks using them if they can't steal your money for a few days and earn some interest on it before finally handing it over to the party that you originally intended to have it. Block chains will be no different. Banks will still take the attitude of "Fuck you, pay me".

Re:What exactly are they doing with it?

[Kjella]

It's a distributed trust network, right? Why would banks that survive on trust want that distributed?

Well there's two parts to it, one is the "chain" property where like git's commits it's not possible to edit one transaction later and have it go unnoticed. You can run independent background audits that confirm that this blockchain state corresponds to these transactions and account balances. It's a lot more difficult than adding one fraudulent transaction by itself, like that somebody deposited cash in your account when they never did. Obviously if you can add "genuine" transaction to the chain that's different, but they can be validated in the process.

The other part is inter-bank transactions where it's essential that everybody agrees on the state of affairs. I wouldn't use the "proof of work" but rather signatures of trusted parties, one party one vote. If 100 banks get an inter-bank ledger, 98 of 100 agree on the block chain all the alarms should go off in the last two banks. With signing and countersigning it's pretty hard to go back on anything as 100 banks have digitially signed that they saw your bank digitally sign that this block chain is correct. Because it's harder than you think to find one trusted master to rule them all, both domestically and internationally. Everybody wants to do their own verification which is exactly what block chains provides.

Re:What exactly are they doing with it?

[TeknoHog]

It's a distributed trust network, right? Why would banks that survive on trust want that distributed?

Apparently, they don't. Each institution is building its own, private blockchain to stay buzzword compliant, not because it makes any technical sense.

It's like hearing about the Internet for the first time, and proceeding to build a private, closed version -- which really happened several times, but eventually people realized that the whole point about the Internet is not being private or closed.