This has nothing to do with Bitcoin. The interest is in distributed ledgers. It's a way to do a distributed clearing house. When twenty or so mutually mistrustful financial firms maintain a blockchain between them, they can have a ledger that no single party, or less than a majority of the parties, can tamper with.<p>This doesn't require Bitcoins, a currency, or mining. It's a way to solve a problem that currently requires institutions such as the Bank for International Settlements and Depository Trust Corporation.<p>Bitcoin has demonstrated that the blockchain technology is resistant to attack. Even against massive fraud attempts, and even though many of the major figures in the Bitcoin world ended up going to jail, the blockchain held up. That's impressive.
I can't believe that there's any possibility of banks doing anything of value on the Bitcoin blockchain when they could easily coopt the blockchain tech and set up trusted miners. The public immutable ledger with full transaction history is obviously interesting to Wall St. but what are the chances any of these banks will trust anything of value to the current ideological devs of a ~$3B commodity controlled entirely by unknown Chinese miners? The underlying notional of anything interesting on Wall St. is measured in trillions.. Can you imagine them suffering through the squabbling with the block size debate or hoping that miners don't collude to roll back the last month's transactions?
This has been posted here before, but many financial firms are interested in a block chain concept (not necessarily bitcoin) for processing settlements.
I imagine it will be the same clearing houses and broker-dealers of today, except that counter-party risk is reduced.
I've read many of these "The NYSE is using bitcoin!" articles and I'm still not sure if the banks are using the wrong words, or if the journalist are? Maybe I'm missing something?<p>One of the most critical parts of the Bitcoin network is the number of competing (non-colluding) parties doing proof of work. Re-writing the ledge would be entirely possible (and possibly easy) if there were only one or two parties processing transactions.<p>If its just the NYSE "using Bitcoin technology" then haven't they effectively encoded transactions into a linked-list with a few frivolous hashes placed throughout? You need a lot of competing minors to produce the trusted ledger the global Bitcoin network enjoys. If these banks are serious about using Bitcoin (or at least what I define as Bitcoin) then how do they plan on incentivizing a diverse set of non-colluding minors?
Bitcoin's underlying problem as a monetary system is the same that exists with commodity based currencies like gold.<p>Almost all economical models that exists out there always reach a point of indeterminacy. What happens when there is massive inequality in the bitcoin world ?<p>Money has one important purpose :<p>1) Efficient allocation of labor for society's benefit.<p>To achieve it we need to establish something that can be used as a source of value.<p>Bitcoin solves the problem of source of value but we know from history that it doesn't always solve the problem of efficient labor productivity.<p>Since by definition society requires centralization to direct its purpose. FDR during the great depression had the same problem of a lot of people having liquidity with no need to direct it for labor productivity.<p>If we lived in a bitcoin world it would be impossible for governments to mobilize itself to direct resources to solve social problems.<p>"You became rich from digging oil from the ground and making computers ? Too bad I need your money to solve Climate Change and feed the poor"<p>The blockchain is interesting - I think it can solve public trust issues like when it comes to e-voting and reaching decentralized concession. But when it comes to economics it just seems silly that a completely decentralized system makes sense.