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Bank of America Tech Chief Is Skeptical of Blockchain Even Though The Company Has the Most Patents For It (cnbc.com)
Bank of America tech and operations chief Cathy Bessant said she is bearish on blockchain, the technology underpinning cryptocurrencies. "I will be curious to see what the actual volume of usage is on the JPM Coin in a year," she said. Slashdot reader technocrattobe shares a report from CNBC: "What I am is open-minded," Bessant said recently in an interview at the bank's New York tower. "In my private scoreboard, in the closet, I am bearish." Bessant is wading into the debate about the blockchain, whose proponents have claimed will be as significant as the internet. A blockchain is an encrypted database that runs on multiple computers, potentially cutting out the need for centralized authorities like banks or governments to settle transactions between parties.
The technology got a boost from rival J.P. Morgan Chase, which revealed last month that it created the first cryptocurrency backed by a major U.S. bank to facilitate blockchain-related payments. But Bessant, who oversees 95,000 technology workers and was named the most powerful woman in banking last year, is a pragmatist. She started out at Bank of America in 1982 as a commercial banker, eventually rising to a series of top roles, including head of corporate banking and chief marketing officer. She has run the bank's global technology and operations division since 2010. Most of what she sees doesn't make sense for finance or significantly improve upon existing methods. She said it's a technology in search of a use case, rather than something designed specifically to solve existing problems. "I haven't seen one [use case] that even scales beyond an individual or a small set of transactions," Bessant said. "All of the big tech companies will come and say 'blockchain, blockchain, blockchain.' I say, 'Show me the use case. You bring me the use case and I'll try it.'" She added: "I want it to work. Spiritually, I want it to make us better, faster, cheaper, more transparent, more, you know, all of those things."
The report notes that Bank of America "has applied for or received 82 blockchain-related patents, more than any other financial firm, including payment companies Mastercard and PayPal."
The technology got a boost from rival J.P. Morgan Chase, which revealed last month that it created the first cryptocurrency backed by a major U.S. bank to facilitate blockchain-related payments. But Bessant, who oversees 95,000 technology workers and was named the most powerful woman in banking last year, is a pragmatist. She started out at Bank of America in 1982 as a commercial banker, eventually rising to a series of top roles, including head of corporate banking and chief marketing officer. She has run the bank's global technology and operations division since 2010. Most of what she sees doesn't make sense for finance or significantly improve upon existing methods. She said it's a technology in search of a use case, rather than something designed specifically to solve existing problems. "I haven't seen one [use case] that even scales beyond an individual or a small set of transactions," Bessant said. "All of the big tech companies will come and say 'blockchain, blockchain, blockchain.' I say, 'Show me the use case. You bring me the use case and I'll try it.'" She added: "I want it to work. Spiritually, I want it to make us better, faster, cheaper, more transparent, more, you know, all of those things."
The report notes that Bank of America "has applied for or received 82 blockchain-related patents, more than any other financial firm, including payment companies Mastercard and PayPal."
The blockchain exudes technological determinism. It's built on the assumption that changing society is done by changing its technologies.
We've been here before. The distributed nature of the internet was meant to create a more egalitarian society, in its image. The project failed, and birthed surveillance capitalism. Do you think the technologists learned their lesson? No, they double down and created a new technology that's even more distributed. Surely this time it will work!
All this neo-liberal American nonsense about needing a blockchain because institutions can't be trusted, people can't be trusted.. It's built on such a negative world view. The truth is it's just as important to be engaged in creating better democratic institutions.
We lost our faith in god in the enlightenment, we lost our faith in politics last century, and we lost our faith in the invisible hand of the economy in 2008. I understand technology may feel like the best place to place your hope for a better future. But in the long run, the only thing that ever truly creates a better society is investing in the people, and shared ideas that slosh around its cultural playground. What we need now from Silicon Valley is critical thinking and self reflection.
Unfortunately, if the blockchain shows us anything, it's that the Califonian Ideology has become Californian Fundamentalism.
I though blockchain was a photographically signed database.
Apart from that, I completely agree with this.
You don't get anonymity with blockchain currency unless you make significant efforts to hide who owns each wallet. This costs money in transaction fees (a lot of money, of you want it to effectively provide privacy), and is usually called money laundering in the non-blockchain world.
Read to this point. Whoever wrote this article needs to do a little bit of research before pretending to know anything about blockchains.
The part that makes it "crypto" is the fact that cryptographic signatures are used. No encryption involved.
"No man's life, liberty, or property are safe while the legislature is in session." -- Judge Gideon J. Tucker
Yep, she's a banker.
The Blockchain is just a database, design in a way that updating data is very expensive. The only application is Bitcoin. Outside Bitcoin; A Blockchain can't be secured, and so, is just a costly misplaced technology; A classical database will do the job better.
Look at any of the mining sites and you'll see the only calculation made is the amount of energy consumed per coin mined. The big mining operations consume huge amounts of energy.
"Spiritually, I want it to make us better, faster, cheaper, more transparent, more, you know, none of those things."
There, fixed that for you.
Dear Cathy,
You can abolish the whole concept of usury today. As we speak. You know, charge a fee for actual work, like all real economic activity out there. That alone would instantly achieve all the goals you lied about. Oh, and if you want to be transparent, stop calling it "that what is in between" in latin.
Nae king! Nae laird! Nae yurrupiean pressedent! We willna be fooled again!
It doesn't seem like a huge surprise to combine pessimism with patent accumulation: the cost of having a few relevant staff working on the project and some patent filings is fairly modest; and should blockchains exceed expectations having some strategically placed patents will be very valuable.
It's speculative behavior, not startup-that-believes-it-is-changing-the-world stuff; but making a modest investment because it has a low probability of a huge payoff is hardly irrational or unusual among people who can afford to lose the investment if the most probable outcome occurs; which likely covers BoA.
From the perspective of a banker, her arguments make perfect sense, and her attitude would serve her well in other roles where directing product development is important.
I'd hire her.
You don't have to think that banks are a good thing to admit that she's got the greybeard attitude.
A lot of successful people like to gamble and compete. They are risk takers, entrepreneurs and the like. Crypto's are another gambling chip, like a non-voting, non-dividend paying stock. From the "customer is always right" file, if people want another game to play, and there's profit in it, give them what they want. Perhaps some emergent properties of this market will appear which may be socially useful. Of course the opposite could occur too. Remains to be seen.
If you're skeptical about cryptocurrency, of course you'd invest in patenting the related tech. That way you don't take unnecessary risk on the volatility of the market, but still stand to make money if it works out in the end. You can even make money off it even if it doesn't work out, since you can always sell those patents to gullible ideologues or desperate patent trolls.
Those who do not learn from commit history are doomed to regress it.
Banks and governments do not "settle transactions". Banks provide financial services like loans and storage. Governments provide and back currencies. Central banks manage money supply. Banks and governments work together to create central banks.
Banks and central banks together created the Automated Clearing Houses that settle transactions.
Blockchain provides a way to create and back currency without government, while acting as its own central bank and clearing house. However, consumer and commercial banking is still necessary. And, where blockchain is a problem.
Banks create money by lending out deposited funds. I cannot begin to explain how incredibly important this is to modern economies. Unless a cryptocurrency can exist in two accounts at once (which is how lending and savings accounts work), that function would be broken and the economy would grind to a halt.
Has no technology background. Take your Business Admin defree and shive it up your ass.
Bessant is an ass licking, publicity seeking, idiot.
Iâ(TM)ve met her, and she is a complete dipshit when it comes to understanding technology.
This is the same cow that went on Dancing with the Stars and made a fool out of herself. I would have fired her for that stunt. Brian Moynihan is her bastard boss, and he delights in having her front everything so he looks clean.
Bank executive is bearish on technology that could make banks obsolete.
Film at 11.
Didn't know I was money laundering when I was paying my hairdresser.
Those aren't all at Bank of America right?
What is a good use of blockchain outside of Bitcoin? I've heard some plausible ideas - like verifying a chain of custody or the provenance of an artwork - but I don't see how these small-scale, specialized versions can deal with the 51% attack problem. Can anyone come up with more realistic uses of blockchain?
blockchain ins't anonymous. In fact, there are companies that exist for the sole purpose of finding out who did what and when.
The Kruger Dunning explains most post on
This isn't even remotely true
"When life gives you lemons, don't make lemonade. Make life take the lemons back!" -- Cave Johnson
Google, and well every publicly funded company are not evil, but by definition they are their number on priority is to their shareholders, if would be unethical for them not to try to make as much money as LEGALLY possible. Think about it if you where a debt collector and just wrote off debts of people who you thought where truly in need your employer would have every right to be angry with you.
The governments role should be to state and enforce what is legal. The problem is that through lobbing and campaign funding companies control the law, and it is their duty to make the law so they can once again maximize profit. Campaign contributions and lobbying should be illegal, campaigning should be publicly funded, and allow small players to have a fair say. I know it may cost, but allowing the rich and companies to determine our laws costs you much more. Also if a company has some valuable input into a law then it should be in public, and up for debate, not a some private lunch or club.
P.S. the reason I don't believe they are evil, it is nature of what a company is. You don't say a cat is evil because it kills mice, it is just what cats do. Same with google, it is not evil because tries to make as much profit as possible, that's just what companies do.