Blockchain Technology Could Save Banks $12 Billion a Year (silicon.co.uk)

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Blockchain Technology Could Save Banks $12 Billion a Year (silicon.co.uk)

Posted by BeauHD on Tuesday January 17, 2017 @12:05PM from the money-in-the-bank dept.

Mickeycaskill quotes a report from Silicon.co.uk: Accenture research has found Blockchain technology has the potential to reduce infrastructure costs by an average of 30 percent for eight of the world's ten biggest banks. That equates to annual cost savings of $8-12 billion. The findings of the "Banking on Blockchain: A Value Analysis for Investment Banks" report are based on an analysis of granular cost data from the eight banks to identify exactly where value could be achieved. A vast amount of cost for today's investment banks comes from complex data reconciliation and confirmation processes with their clients and counterparts, as banks maintain independent databases of transactions and customer information. However, Blockchain would enable banks to move to a shared, distributed database that spans multiple organizations. It has become increasingly obvious in recent months that blockchain will be key to the future of the banking industry, with the majority of banks expected to adopt the technology within the next three years.

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... move to a shared, distributed database ... by Anonymous Coward · 2017-01-17 12:11 · Score: 2

What could possibly go wrong...
1. Re:... move to a shared, distributed database ... by omnichad · 2017-01-17 12:15 · Score: 2
  
  It's also very hard to have privacy.
2. Re:... move to a shared, distributed database ... by murdocj · 2017-01-17 12:18 · Score: 1
  
  unless, of course, you manage to get a majority of the people to record it incorrectly... but gee, that's impossible, right?
3. Re:... move to a shared, distributed database ... by AK+Marc · 2017-01-17 12:24 · Score: 1
  
  That's why if you give someone your wallet so you can accept a payment, they have your home address and SSN.
  
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4. Re:... move to a shared, distributed database ... by Jeremi · 2017-01-17 12:25 · Score: 2
  
  unless, of course, you manage to get a majority of the people to record it incorrectly... but gee, that's impossible, right?
  Nothing's impossible. However, the relevant question would be, is it harder to subvert a blockchain-based system (where you need subvert "a majority of the people") than the current system (where you need to subvert only one person, as long as it is the right person)?
  
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5. Re:... move to a shared, distributed database ... by magarity · 2017-01-17 12:34 · Score: 2
  
  unless, of course, you manage to get a majority of the people to record it incorrectly... but gee, that's impossible, right?
  I do hope you're being sarcastic; it's easy to imagine an implementation of replication with a security hole that allows a falsified entry to propagate to all the nodes quickly and efficiently.
6. Re:... move to a shared, distributed database ... by Gorobei · 2017-01-17 12:52 · Score: 2
  
  If you broadcast something everywhere, and people record it everywhere, it's very hard to go back and forge the past of that decentralized record.
  True, but proof-of-work blockchains are a *really* expensive way to achieve the goal. It is far cheaper to have both parties just cryptographically sign a transaction and keep a copy themselves or even post it to a public repository.
  Blockchains solve the double-spend problem. Great, but banks don't typically have that problem in the first place because the currency is not the record.
7. Re: ... move to a shared, distributed database ... by manu144x · 2017-01-17 13:12 · Score: 1
  
  There is a simple way to manage errors. Just issue an update correcting the error. That is one thing and it's perfectly normal. You get by error 1 million dollars to your account, the next second a correction is emitted and the transaction is reverted. As long as there is a history it's fine. But making a transaction disssapear as if it never existed that is a different story...
8. Re:... move to a shared, distributed database ... by liquid_schwartz · 2017-01-17 14:07 · Score: 1
  
  ...Blockchains solve the double-spend problem. Great, but banks don't typically have that problem in the first place because the currency is not the record.
  Based on fractional reserve banking banks have way more than a double spend capability. They have ~33x spend capability.
9. Re:... move to a shared, distributed database ... by ASDFnz · 2017-01-17 14:41 · Score: 1
  
  That's why if you give someone your wallet so you can accept a payment, they have your home address and SSN.
  You don't seriously believe that do you?
10. Re:... move to a shared, distributed database ... by BlueStrat · 2017-01-17 17:17 · Score: 1
  
  Blockchains solve the double-spend problem. Great, but banks don't typically have that problem in the first place because the currency is not the record.
  It could be another strategy for getting to a cashless economy. If the money is digital it can be cut off, confiscated, or pretty much anything the controlling authority decides. The only way it would be allowed to go forward is if there's a way for government to control and track it.
  Strat
  
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  Progressivism (aka US 'Liberalism'): Ideas so good they need a police/surveillance-state to enforce.
11. Re:... move to a shared, distributed database ... by ShanghaiBill · 2017-01-17 18:00 · Score: 1
  
  True, but proof-of-work blockchains are a *really* expensive way to achieve the goal.
  Bitcoin is based on "proof-of-work", but the banking blockchains are not implemented that way. They are much less computationally expensive. Anyone can mine bitcoins, but the banking blockchains are only accessible (or at least writable) by members of the club. If you don't have a SWIFT code, then you don't have access.
12. Re: ... move to a shared, distributed database ... by AxeTheMax · 2017-01-17 19:21 · Score: 1
  
  They can already do that, and you can do it to them. The value of whatever you have will then fall. But the fact that people and businesses can do it is what (for instance) causes currency and stock market fluctuations.
13. Re:... move to a shared, distributed database ... by RouanVanDerEnde · 2017-01-17 19:49 · Score: 1
  
  And thats why Monero is growing faster than bitcoin. Website: https://getmonero.org/home Its very clever in the way it obfuscates the data in such a way that you get privacy, blockchain, openness and security. Possibly the best form of electronic money in existence right now, just a bit unknown to the world still. The supply of monero is similar to bitcoin (about 14 million right now) and they trade at about $12.50 per monero. So its digital money you can send anywhere without a bank and its untraceable.
14. Re:... move to a shared, distributed database ... by Goaway · 2017-01-18 02:12 · Score: 1
  
  This is what bitcoiners actually believe.
Innovation, absence of, banks from by Anonymous Coward · 2017-01-17 12:16 · Score: 1

Blockchain - worth billions.
Did any bank invent it? nope.
Innovation does not come from encumbents.
1. Re: Innovation, absence of, banks from by Qzukk · 2017-01-17 12:42 · Score: 4, Funny
  
  When incumbents get fat and lazy and start slowing everything down, they become encumbents.
  
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  If I have been able to see further than others, it is because I bought a pair of binoculars.
2. Re: Innovation, absence of, banks from by ls671 · 2017-01-17 12:49 · Score: 4, Funny
  
  You should at least tell him how to spell it correctly:
  encumbanks
  
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  Everything I write is lies, read between the lines.
3. Re: Innovation, absence of, banks from by coofercat · 2017-01-18 02:16 · Score: 1
  
  cucumbanks jokes in 3...2...1... ;-)
Sounds familiar by quonset · 2017-01-17 12:20 · Score: 5, Insightful

I remember, back in the day, when ATMs were first proposed. They would save the banks soooo much money. They could have fewer employees since now their customers could get to their money whenever they felt like it. There would be less paperwork, shorter lines, the benefits were endless.
Which is why you are now charged to get your own money if you're not using your own bank's ATM.
I wonder what money-grabbing scheme banks will implement if they start using blockchains?
1. Re:Sounds familiar by AK+Marc · 2017-01-17 12:26 · Score: 1
  
  How could the monetize blockchain? Blockchain is used here to mean "secure central account data back-end". It's hard to charge a user for a back-end system.
  
  --
  Learn to love Alaska
2. Re:Sounds familiar by DogDude · 2017-01-17 12:30 · Score: 1
  
  You should use a credit union. They're non-profits, so they generally don't try to fuck you, like banks do.
  
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  I don't respond to AC's.
3. Re:Sounds familiar by Motherfucking+Shit · 2017-01-17 12:39 · Score: 5, Insightful
  
  It's hard to charge a user for a back-end system.
  Said no bank executive, ever.
  
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  "BSD: Free as in speech. Linux: Free as in beer. Windows 10: Free as in herpes." --Man On Pink Corner in #52607549.
4. Re:Sounds familiar by ls671 · 2017-01-17 12:52 · Score: 1
  
  Easy: a new encryption fee, justified by the fact that encryption is CPU intensive and cost a lot of electricity.
  
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  Everything I write is lies, read between the lines.
5. Re:Sounds familiar by ls671 · 2017-01-17 12:57 · Score: 1
  
  The biggest credit union in North America (260 billion in total assets) has become much worse than banks.
  
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  Everything I write is lies, read between the lines.
6. Re:Sounds familiar by DogDude · 2017-01-17 14:10 · Score: 2
  
  Sounds interesting! Care to share what this secret credit union is? Google doesn't show any credit unions with 260B in assets. The largest seems to be Navy Federal, with ~70-80B in assets.
  
  --
  I don't respond to AC's.
7. Re:Sounds familiar by Desler · 2017-01-17 14:16 · Score: 2
  
  No it's not. It's just listed as an obscure fee in your account contract that most will never read.
8. Re:Sounds familiar by swillden · 2017-01-17 15:14 · Score: 1
  
  It's hard to charge a user for a back-end system.
  Said no bank executive, ever.
  FWIW, I've heard bank executives say pretty much exactly that. Typically they don't say "charge a customer", they couch it in other terms like "recoup investment", "generate revenues", etc., but they definitely say it, because it's true.
  
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9. Re:Sounds familiar by ls671 · 2017-01-17 18:51 · Score: 1
  
  https://www.desjardins.com/ca/...
  
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  Everything I write is lies, read between the lines.
10. Re:Sounds familiar by gumbi+west · 2017-01-17 18:55 · Score: 1
  
  ah, but how is it worse than a bank?
11. Re:Sounds familiar by ls671 · 2017-01-17 18:58 · Score: 1
  
  Deal with the small, local community oriented ones ;-)
  
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  Everything I write is lies, read between the lines.
12. Re:Sounds familiar by ls671 · 2017-01-17 19:18 · Score: 1
  
  Never mind, it was just a publicity stunt.
  
  --
  Everything I write is lies, read between the lines.
13. Re:Sounds familiar by sabbede · 2017-01-18 01:03 · Score: 1
  
  It'll be something. That $12b in savings might also cost them the ability to manipulate transactions in order to generate billions in fees.
  Not that they bear the burden of that $12b. We get to do that for them (where do you think those ATM fees came from?), plus a little extra, because banks treat us like shit and there's nothing we can do about it. They inflate their costs and pass them directly onto us - so saving money might actually lower profits. If something cost them $12b, they were probably charging us $13b for it.
14. Re:Sounds familiar by thegarbz · 2017-01-18 04:39 · Score: 1
  
  Which is why you are now charged to get your own money if you're not using your own bank's ATM.
  Really? That is legally allowed where you live?
Why should I care again? by SeaFox · 2017-01-17 12:26 · Score: 2

Unless I own a bank, it's not like I, as a regular consumer, will see any benefit. The savings are all going to go into the pockets of a few fats cats who don't really need the extra money anyway.
1. Re:Why should I care again? by Anonymous Coward · 2017-01-17 12:47 · Score: 1
  
  As a consumer, you will see transactions be processed near instantaneously. Right now when you make a deposit or transfer it takes quite awhile for it to be processed.
  Have you ever used Bitcoin or any other blockchain-based cryptocurrency?
  Bitcoin is fucking slow. It can take around 10 minutes for a transaction to end up in a block, and then additional time for however many confirmation blocks are desired/needed after that. Having to wait 10 minutes, or even 30+ minutes, before a transaction can be considered confirmed is surely not "instantaneous".
  Other cryptocurrencies based on Bitcoin have tried to reduce the time between blocks, but this can cause other problems, like massive blockchains.
2. Re:Why should I care again? by Anonymous Coward · 2017-01-17 12:57 · Score: 1
  
  "s 100% available to spend, immediately. Of course if it were to somehow bounce or be recalled,"
  Then it's not liquid and your bank is just fucking you.
  With modern computing, even taking the batch processing of banking transactions into account, there is zero reason why a bank account should ever be overdrawn. It's just fuckery from the banks to fuck with the poor people who spend their paycheque every month. It's fucking disgusting that we tolerate it as a community.
  I've always wanted to start a political movement to decree that "a bank account" is now a basic necessity, like water, power, electricity, and to some extent, internet. As such, banks should be forced to offer a basic account entirely free of charge. What I consider reasonable would be free online access, free ATM use (own bank only), free over-the-counter withdrawals, no overdraft, no credit, no bullshit. Sounds good doesn't it. When banks are making huge profits, why the fuck can't we get this going?
3. Re:Why should I care again? by Desler · 2017-01-17 14:42 · Score: 1
  
  Maybe at the First National Bank of Podunk. My bank is only regional and yet I don't have the waits you claim.
4. Re:Why should I care again? by jenningsthecat · 2017-01-17 17:00 · Score: 1
  
  Quoting parent so it will be seen by more Slashdotters, because I believe it's an important point of view.
  
  "s 100% available to spend, immediately. Of course if it were to somehow bounce or be recalled,"
  Then it's not liquid and your bank is just fucking you.
  With modern computing, even taking the batch processing of banking transactions into account, there is zero reason why a bank account should ever be overdrawn. It's just fuckery from the banks to fuck with the poor people who spend their paycheque every month. It's fucking disgusting that we tolerate it as a community.
  I've always wanted to start a political movement to decree that "a bank account" is now a basic necessity, like water, power, electricity, and to some extent, internet. As such, banks should be forced to offer a basic account entirely free of charge. What I consider reasonable would be free online access, free ATM use (own bank only), free over-the-counter withdrawals, no overdraft, no credit, no bullshit. Sounds good doesn't it. When banks are making huge profits, why the fuck can't we get this going?
  I was thinking along similar lines just a few days ago when I was looking at my transaction record and noting how badly I was being hosed by totally spurious 'service fees'. Back when all of the tracking and calculation was done manually by paid employees, banks still paid interest on even a few dollars in a savings account. Now that the tracking is done by computers and costs WAY less than it did 50 years ago, the banksters are charging way MORE and aren't paying interest unless a customer maintains a fairly hefty minimum balance. A one-hundred-dollar balance can disappear in time, without any withdrawals, simply because of bullshit fees. The entire banking system is basically legalized theft - it's a scam, and we ought to be treating the perpetrators the same way we treat any other scammer, thief, or con artist.
  
  --
  'The Economy' is a giant Ponzi scheme whose most pitiable suckers are the youngest among us and the yet-unborn.
5. Re:Why should I care again? by Kkloe · 2017-01-17 18:02 · Score: 1
  
  in what third world banking country do you live?, here we have instantaneous transfers, we even have an app where I can send people money based on their phone number and they get the money as soon I press send even if they have a different bank than mine
6. Re:Why should I care again? by gumbi+west · 2017-01-17 19:01 · Score: 1
  
  The US. When I transfer money between accounts it takes 4 days and the money is in neither account for two or three of them. There is no technological reason for this. Given the incredibly low interest rates, I really don't get the reason for it.
7. Re:Why should I care again? by tlhIngan · 2017-01-17 19:22 · Score: 1
  
  Bitcoin is fucking slow. It can take around 10 minutes for a transaction to end up in a block, and then additional time for however many confirmation blocks are desired/needed after that. Having to wait 10 minutes, or even 30+ minutes, before a transaction can be considered confirmed is surely not "instantaneous".
  Other cryptocurrencies based on Bitcoin have tried to reduce the time between blocks, but this can cause other problems, like massive blockchains.
  Currently our banking system confirms transactions on the order of days. If you're lucky, it's within 24 hours.
  30 minutes is instantaneous compared to days to post.
  Oh sure, yes, when you use your credit card or debit card, the money is taken (reserved, or held) immediately, but it doesn't actually move to the recipient's account until days later when the transaction is confirmed and posted.
  Sure, there are plenty of ways we make it seem instant - when you use those debit cards that let you send money, they trivially adjust the balance immediately but the cash behind it doesn't actually move until days later. Depending on the relationship with the banking institution, this posting time may be assumed to happen immediately (i.e., you're trustworthy enough that the bank believes the transaction to be legit and will let you access it immediately), or wait through the holding time for the money to actually arrive.
  Cheques take the longest to clear because of all the steps - the recipient deposits it which creates a transaction entry. Then the bank sends it to a clearing house where the cheques are routed to the right bank keeping note of the transaction, and the bank then gets it which gets the note to remove that money from your account. That's only half, since the bank needs to send that money back through the clearing house to the recipient account. Since so much mailing was required, taking 12+ days wasn't unusual. Modern day we can electronically process cheques, so when you snap the photo, the transaction is created then and there, and the image of that cheque then goes through the clearing house which routes it to the right bank, all electronically. At least this speeds things up immensely, down to 3-4 days.
  Blockchain technology speeding this up makes 30 minutes feel like instant. You put a transaction in the chain and it's basically right there for scrutiny, and once the block is confirmed enough times, it's a permanent record.
8. Re:Why should I care again? by JonnyCalcutta · 2017-01-17 22:50 · Score: 4, Informative
  
  Actually, this has happened in the UK. I don't think it was legally forced but was more a suggestion from Government ("do it voluntarily or we'll force you"). The reasoning was a bank account is a basic requirement of living in the UK and not having one was making life more expensive for poorer people.
  The banks don't push them so you have to ask. And like you suggest you get none of the bullshit - no overdraft, no credit but full online banking, over the counter, etc. And on the plus side, you get no overdraft, no credit and hence no charges.
9. Re:Why should I care again? by jenningsthecat · 2017-01-18 01:11 · Score: 1
  
  we ought to be treating the perpetrators the same way we treat any other scammer, thief, or con artist
  Electing them President?
  That would be funny, if it wasn't so pointedly true.
  
  --
  'The Economy' is a giant Ponzi scheme whose most pitiable suckers are the youngest among us and the yet-unborn.
10. Re:Why should I care again? by DanielRavenNest · 2017-01-18 12:38 · Score: 1
  
  My broker sent money via ACH to my credit union. They sent it four days ago, and it just arrived today. Bitcoin doesn't take weekends or holidays. An hour or less to fully confirm a transaction is like lightning compared to the traditional banking system.
  Note that ACH means Automated Clearinghouse i.e. the money is sent via computers. And it still takes up to 4 days.
11. Re:Why should I care again? by gumbi+west · 2017-01-18 16:33 · Score: 1
  
  I'm thinking the same. I'm just surprised the cost of setting it up that way didn't exceed the money they make back.
Less than 10 years after 'robo signing' scandal by Anonymous Coward · 2017-01-17 12:50 · Score: 1

In case you don't remember, the last time a brilliant silicon valley idea to speed up bank transactions was implemented on a massive scale, it directly led to massive mortgage fraud that was an important factor in destroying the economy in 2008 and leading to the Great Recession. I refer to the robo-signing scandal where some folks decided the old fashioned way of doing mortgages was too slow, so why not have bank employees just use a computer to rubber stamp mortgage paper work and overlook all those little details like "can this person making minimum wage afford $10,000 a month mortgage"
The reason banks do things a certain way is not because they hate innovation, it's because the number one job of a bank qua bank is to be dependable and reliable method which value can stored and transferred between parties. Yes all the other stuff about profit etc is true, but even communist countries have banks for the reason i stated.
I know people love cutting costs but when you cut costs so much that you have a bunch of tech guys handwaving a technology that is at the fundamental core of what banking is, to the business guys who don't understand it, then the consumers are about to get left out of the system, and the taxpayers probably don't want to do another bailout of banks like they did in 2008. And let's face it - most tech people do not even understand block chain. Ask them to explain the Bitcoin chain fork for example.
INVESTMENT Banks by edibobb · 2017-01-17 13:00 · Score: 2

This is about investment banking, not the retail banking most of us use. You remember investment banks, don't you? The ones that were too big to fail a few years ago after branching out into areas with little or no regulation?
1. Re:INVESTMENT Banks by Actually,+I+do+RTFA · 2017-01-17 13:04 · Score: 1
  
  Where's the harm in having too big to fail entities with little/no regulation keep track of all their information in a blockchain. It's not like there's a possibility of a disagreement about who owns that $1billion asset. Oh well, too big to fail, the taxpayers should just buy an additional copy of that asset so they each have one.
  
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2. Re:INVESTMENT Banks by Actually,+I+do+RTFA · 2017-01-17 15:56 · Score: 1
  
  I do believe the federal government has experience with huge quantities of data.
  
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3. Re:INVESTMENT Banks by gumbi+west · 2017-01-17 19:02 · Score: 1
  
  The Feds are either capable of anything or total losers. It just changes based on what is convenient for the current story.
4. Re:INVESTMENT Banks by Actually,+I+do+RTFA · 2017-01-18 05:38 · Score: 2
  
  Both can be true. I have no doubt that there are elite groups within the government who could track me with a satellite 24/7 or have me die of natural causes within hours of the order being given. I also have no doubt there are many people who are less competent. But then again, only 10% of any organization is competent, so...
  
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shared database asking for corruption by kiviQr · 2017-01-17 13:11 · Score: 1, Troll

Wow, what a great idea! (irony). Literally one database corruption (see recent pot data corruption posts) could wipe whole nation's savings.
1. Re:shared database asking for corruption by ASDFnz · 2017-01-17 13:53 · Score: 1
  
  In a 'blockchain' scenario each entity keeps their own copy of the chain that is cryptographically put together.
  If somehow one participant does manage to corrupt their copy of the chain it is instantly detected (bad cryptographic chain) they can resemble it from the other participants (once again, cryptographically so they don't actually need to trust that the other participants are giving them the right information).
2. Re:shared database asking for corruption by ebyrob · 2017-01-17 15:06 · Score: 1
  
  Yeah, it's a great time to break out new cryptographic technology to a giant slow-moving market. It's not like there's anything on the horizon that could cause a problem.
3. Re:shared database asking for corruption by ASDFnz · 2017-01-17 15:25 · Score: 1
  
  Quantum computing is indeed a challenge that needs to be met sooner or later, there are a lot of theories about how to protect cryptography but as your links point out quantum computing is still in its infancy and without working prototypes we are still not sure what we will and will not be able to do.
  Worst case scenario (and quite likely) just about every form of cryptography we have today is in jeopardy and if we don't react quickly enough the entire internet let alone things like blockchains are going to fall to bits.
  Strangely enough, because a significant portion of blockchains includes hashing and are not vulnerable a blockchain will probably survive but it won't be much use because the internet won't.
  It is a bit like worrying that your car won't work anymore if a meteorite destroys the planet.
4. Re:shared database asking for corruption by gumbi+west · 2017-01-17 19:05 · Score: 1
  
  I don't think any of the bulk encoders are susceptible. It's just sharing of keys and verification of identity that won't work. I do realize that these are not minor issues.
Blockchain != trustless p2p by batkiwi · 2017-01-17 14:34 · Score: 4, Insightful

Bitcoin/litecoin/dogecoin/etc attempt to solve the trustless peer to peer model.
A multi-bank blockchain implementation would not use a trustless model, it would be a trusted model where the sender and receiver both sign the transaction, and it is then added to the blockchain for consumption by all participating banks.
It's a way to share an immutable (without retracting ALL transactions before the transaction to be deleted) ledger, in this case between trusted parties.
1. Re:Blockchain != trustless p2p by Anonymous Coward · 2017-01-17 19:35 · Score: 2, Interesting
  
  The computation and storage burden for maintaining a block chain is not zero. In fact, it can even be more than it otherwise would be in a more conventional data store such as a relational database. Bitcoin, Litecoin and Dogecoin solve this problem by paying the maintainers in the form of newly created units of digital currency. Banks already have the government granted power to create currency by booking assets and lending against them, so there's nothing for them to gain there. Having a public ledger is arguably a disadvantage. How would you feel about a bank that made all of your transaction records public? Some countries, like Switzerland for example, actually go as far as to legislate bank privacy. Finally, the public ledger does nothing by itself to create trust between parties. The main thing that people either don't understand or choose to ignore in all of this blockchain hype is that blockchains were initially created to solve a very specific problem with digital cash that has unique or at least uncommon characteristics relative to other data storage problems. Most of the other blockchain applications that I've heard of, including this one, look more like solutions in search of problems. They don't do anything that we need that cannot be done either more easily or cheaply with existing and well tested alternatives, like relational databases with ACID guarantees (yeah, transactions matter in banking).
2. Re:Blockchain != trustless p2p by F.Ultra · 2017-01-18 00:35 · Score: 1
  
  Which have exactly nothing to do with this particular operation of banking (keeping a ledger).
3. Re:Blockchain != trustless p2p by coofercat · 2017-01-18 02:22 · Score: 1
  
  ...'tis one of the many reasons the likes of the Bank of England have been developing their own 'e' currency. They'll run the show, so you won't get to do anything unusual, but you'll still get the benefit of 'e' money transfers/payments etc. It seems like an attempt to 'get with it', but really its a way to make you think you're getting something new and good, whilst still maintaining the status-quo.
4. Re:Blockchain != trustless p2p by John+Allsup · 2017-01-18 02:23 · Score: 1
  
  Importantly, Bitcoin is vulnerable to one party gaining control of over 50% of all hashing. With banks trusting each other, and nobody else allowed to produce hashes, this problem is essentially no longer there. I'd quietly commented to friends it was only a matter of time before banks start doing something like this.
  
  --
  John_Chalisque
Save on processes - pay on infrastructure by dsmalle · 2017-01-17 19:52 · Score: 1

Every time I see blockchain proposed to replace existing processes I see few remarks on the investments required to set up a "shared, distributed database that spans multiple organizations".
I'm pretty sure the regulators will require these databases to have a high level of security (which is built in, blockchain adepts will say), a high level of resilience (per bank, not as a 'distributed' system). This will drive up cost.
On top of that, a distributed database of investment transactions must be able to handle the load of the many millions of such transactions per day. The data will be replicated, which will require tons of storage. And the systems will need to be fast, tons of servers required.
So, I'm not so sure this will happen in the near future.
saving money by Tom · 2017-01-17 20:06 · Score: 3, Insightful

Actually working in the banking business instead of gambling in the stock exchange casino would save banks hundreds of billions. No wait, scratch that, it would save taxpayers hundreds of billions.

--
Assorted stuff I do sometimes: Lemuria.org
1. Re:saving money by Tom · 2017-01-19 21:17 · Score: 1
  
  Is that US-only or is that the story they are telling?
  I look at Spain and Italy and Greece and while they didn't have the best economy to start with, it was the bailouts that did them in.
  I also wonder, where did these billions come from? The stock exchange is a zero-sum game. So who paid these billions to the taxpayer?
  
  --
  Assorted stuff I do sometimes: Lemuria.org
12 billion dollars is not worth it. by 140Mandak262Jamuna · 2017-01-18 00:36 · Score: 1

If the savings is just 12 billion dollars, the banks will not bother. They make that much between breakfast and lunch probably. If it ever levels the playing field ever so slightly, they won't do it. Even if there is the merest whiff of suspicion of a suggestion about the probability of giving small banks a couple of molecules of benefit, the big banks will spend 12 billion to thwart it.
The motto, the dream, the hope, the aspiration of every bank is to become so big no one else can compete, and to divert all the profits as executive salaries, boni and other incentives.

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sed -e 's/Chuck Norris/Rajnikant/g' joke > fact