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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.
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.
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.
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.
Right; this is what a lot of the bitcoin fanatics don't understand the fractional reserve component of banking is their real role in the economy. I am not saying banks don't generate revenues in various ways off transaction processing but that isn't the core business. I am sure they won't like that part of the pie taken from them and will find ways to leverage their existing market positions in the space to keep themselves there. \\
Which is another thing you bitcoin nerds to realize it IS GOING TO ZERO. Even if some blockchain based cryptocurrency does become as ubiquitous as the dollar its NOT going to be bitcoin. Don't let the fact the goldman and few others are playing in the space. They are there to make some money speculating off suckers perhaps if they can but its really about developing the methodologies and infrastructure to do blockchain trading in whatever the ultimate currency is. Bitcoin is a research EXPENSE in their view not a profit center.
So why is Btc doomed? Think for a second currency is only valuable in terms of what real property or services it will purchase. Banks hold at least the title to awful lot of real assets. Do you think think they are going to surrender those assets to purchase some new currency? Why would they do that; what possible motive would they have to make a bunch of internet speculators and handful of crypto experts super wealthy? None.. Not when they can simple hire some other smart people (plenty of those) for a fraction of the cost to build them their own currency; which they can back with their existing assets.
Repeal the 17th Amendment TODAY! Also Please Read http://www.gnu.org/philosophy/right-to-read.html
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?