
Wall Street rethinks blockchain projects as euphoria meets reality - thisisit
https://www.reuters.com/article/us-banks-fintech-blockchain/wall-street-rethinks-blockchain-projects-as-euphoria-meets-reality-idUSKBN1H32GO
======
this_user
What does "blockchain" even mean in this generalised context? When we are
talking about crypto currencies, it is a distributed database with a consensus
mechanism that is extremely costly to run. But this is not something you would
need or want in most other situations, because there is always some degree of
trust with your counterparties (and legal recourse if necessary).

If we strip away the consensus mechanism, all that is left is a trivial data
structure that anyone with a CS background could come up with. So, the
question becomes where the real value proposition is in "blockchain
technology" outside of the realm of crypto currencies. What are the things you
can only do with "blockchain technology" that cannot be achieved with existing
technology? It looks more like a marketing buzzword than anything that has
actual merit for the average use case.

~~~
tacogordito
This is my question as well. Blockchain is perfect for a digital currency,
yes. But where else in the real world is it even applicable?

~~~
atomicUpdate
> Blockchain is perfect for a digital currency

It's not perfect for that either. There have already been cases where tokens
were stolen and blockchains were forked to recover them. The very last thing I
want for my money is for errors and/or malicious acts to be permanent and
uncorrectable.

~~~
kosievdmerwe
Yup being able to undo transactions is a feature not a bug of the modern
financial system.

EDIT: it also protects you in cases where someone holds a gun to your head and
forces you to make a transaction.

~~~
evnn
> it also protects you in cases where someone holds a gun to your head and
> forces you to make a transaction.

No. The only case when someone ever threatened to hold gun to my head and
demanded money was taxation. With cryptocurrency it's possible to avoid that,
because they don't know how much money you have. And even when they do know,
it's much harder for them to take it, they need to know password.

~~~
illlogic2
But in reality no one has ever held a gun to your head because of taxes.

~~~
ric2b
Because there's no point in going through all the steps, but that's exactly
where it would end if you absolutely refused to pay taxes and refused to pay
fines or go to jail for not paying.

~~~
illlogic2
I fail to see how having a gun to your head is in any way true. Can you give
any examples of this happening?

Tax evasion is a crime and you should go to jail (you are exploiting the
benefits you have received from society). But big companies find tax loopholes
all the time and they go to white-collar prisons or get away with it anyways.

------
nwah1
It is interesting that even in an article like this that they still say things
like "for all its potential, blockchain is still in its early days." It is
sticking with the unfounded assumption that it will be a success in the
future, if only it is given more time. In technological terms, it is old.
Innumerable efforts have been attempted, yielding almost no fruit.

At what point are the fundamental assumptions going to be questioned?

~~~
hudon
I think the fundamental assumption is that "Satoshi invented a useful solution
to decentralized consensus".

What people don't realize is that Satoshi's solution only works if two
assumptions hold true:

1\. Mining is decentralized: If mining is centralized than relying on proof-
of-work for consensus is waste since the centralized entity controls the
blockchain anyway.

2\. Consensus rules don't change: If you see the threat of #1 and so take
power away from miners (like Bitcoin has done), then you cannot ever change
the consensus ruleset because aside from proof-of-work, Satoshi did not give
any solution to the problem of choosing between 2 chains that have slightly
different consensus rules. If you change the consensus ruleset (ie. make any
changes where 2 nodes disagree on if a block is valid or not), then you need
an oracle to tell you which chain to choose. We've seen this when Core
developers chose the 0.7 Bitcoin chain in 2013 and when Vitalik chose the
forked Ethereum chain in 2016.

At the end of the day, the blockchain's decentralization is a myth because it
relies on false assumptions. Satoshi invented a Rube Goldberg machine that is
currently using as much electricity as a medium-sized country (and also
enabling things like money laundering, drug trafficking, etc.).

~~~
JumpCrisscross
> _Mining is decentralized_

Cryptocurrency mining is as close as one can get to a theoretical free market
in the real world. Free markets have known modes of failure [1]. One of these
is where first-mover advantage and economies of scale combine to produce a
barrier to entry; the result is oligopoly or monopoly.

[1]
[https://en.wikipedia.org/wiki/Market_failure](https://en.wikipedia.org/wiki/Market_failure)

~~~
simias
Except that so far it remains to be seen if that can work at scale. Bitcoin is
moving towards the lightning network which changes things quite a bit, in
particular potentially adding some centralization and giving some nodes
advantages over others (well connected nodes with large open channels will
have an advantage over a newcomer without connections for instance).

Bitcoin cash is trying an other route with bigger blocks but it remains to be
seen if it scales well enough to real-world currency usage. And of course
there's the big problem of cryptocurrencies being useless as currencies
because they're not stable enough. Which itself can be largely blamed on their
limited supply and inflationary nature which is necessary to bootstrap them
(there's an incentive to get in early) but seems to turn against them in the
long run since nobody wants to spend something that's by design supposed to
become scarcer and scarcer.

It might be theoretically free but it doesn't work great so far. And of course
we could discuss whether a completely free market is a good or a bad thing,
but that's a whole different debate.

~~~
cachvico
> nobody wants to spend something that's by design supposed to become scarcer
> and scarcer.

Except that Bitcoin is (with consensual upgrade) infinitely divisible. (E.g.
the network can [vote to] move to 16 decimal places, and so on).

~~~
simias
That's not the argument. The idea is that if a given amount of bitcoins is set
to increase in value as time passes (as is supposed to happen if the currency
is successful) you don't have a lot of incentive to invest or spend your
money.

If you have $100 on your bank account today then you've got incentives to
spend or invest it soon because it's slowly losing value because of inflation,
your $100 will probably buy you fewer goods and services in the future that it
does now.

Now if you have BTC100 on your wallet and you believe that Bitcoin will
succeed as a currency then you know for a fact that these bitcoins will be
more valuable in the future than they are now (because the demand will grow
but the supply is capped). Ergo you have strong incentives to hoard your
bitcoins and not spend or invest them. Your savings gain value without
actually being invested in anything. They don't contribute to the economy,
they don't fund anything.

I don't understand why most cryptocurrency enthusiasts don't see a huge
problem in this. How will you get a loan to start your company in the bitcoin
world? Who would want to take such a risk when they'll keep getting richer by
not doing anything at all? You'd have to promise them ridiculously high
returns (higher than bitcoin's deflation at least). The rich gets richer by
virtue of being rich, the poor needs to buy food and basic utilities so they
can't save their coins to become rich. Basically what we have today, only
worse.

~~~
freedomben
I am a big supporter of crypto currencies, and I do see a problem in that.
However, the current volatility will level off significantly once there is
wider adoption. That will help reduce incentive to hold. I would _never_
recommend somebody give/accept loans in crypto currencies right now. The time
will come though (unless governments squash crypto through regulation or
outright banning).

That said, there's no guarantee that BTC or any crypto will appreciate
indefinitely; in fact quite the opposite. It can (and does) lose value.

This also overlooks the benefits of a non-fiat currency, such as protection
against things like hyper-inflation (most of us don't think about this right
now, but if you have any friends in Venezuela ask them how important this
protection is).

~~~
not_kurt_godel
Ask someone in Venezuela how useful a Bitcoin is when you have no way to get
food.

~~~
tim333
I'd imagine very useful - just sell it for a few thousand and then "Including
Venezuela's equivalent of food stamps, the total pay package now rises to
250,531 bolivars, or $32.19 a month" so it should cover that for a while. Or a
flight out.

------
donmatito
Coming from a logistics background, coordinating tracability data is painful
_within a company_ , even with help of ERP like SAP. But when you need
tracability _across an industry_ , it becomes almost impossible.

I had professional experience in an industry where we had to go to the plants
to ensure rolls of paper certified from suppliers using responsibly-managed
forests were physically separated from the non-certified ones. We needed the
paperwork coming from China, then another one from the transformation plant in
Morocco, then in customer warehouses across Europe.

An external _protocol_ that would provide universal tracability, usable by any
actor of the chain, seem like a great solution to a real problem. Blockchain
provides some "neutrality", ie no need for each actor to find its own
certificate provider (I imagine that service shops would help larger companies
set up their systems, but the back-end would be common across all actors).

I'm not very convinced by pseudo-decentralized apps in most domains, but in
logistics... very bullish !

~~~
simias
If anybody can enter and add entries to your blockchain, how do you ensure
that they don't insert bogus data? If you're tracing a roll of paper what
prevents somebody from adding an entry saying "the shipment got stolen" then
immediately making a new entry for it with different attributes pretending
it's something else? Or simply at the source pretending that something is of a
higher quality than it is?

The answer is that you need some kind of vetting and certification of the
people contributing to your traceability database. So you need a trusted 3rd
party to coordinate all that. So you don't need a blockchain. Instead why not
just have the trusted 3rd party issue certificates like a CA on the web for
instance? People would digitally sign the paperwork and you could collect the
documents and their signatures in a central database. If somebody notices
something wrong you can show that somebody made a fake or erroneous document
and hold them responsible. Then you can publish dump of the database at
regular intervals for people to mirror so that they can see if you attempt to
rewrite history. There, problem solved using good old 1990's technology.

>very bullish !

Interesting that you finish your technical argument with trading lingo. Hodl,
am I right?

~~~
DSingularity
Hehe. Thats actually a nice artifact, thanks bitcoin. Now individuals can
consider the potential of ideas to pan out and participate in funding them.
Sure, sounds good -- I'll throw in 1,000$. Suddenly 1,000 like-minded
individuals can satisfy the need of projects. Of course thats not always so
popular here ;-). I should just mind my own business and focus on the coding
right?

Anyhow. I do think you are right. The integrity of the data has to be
questioned. But I question why we have to assume that its useless just because
it cannot be trusted? This paper trail is immutable. That is valuable. Future
evidence can expose prior lies. Once you know that you have to maintain a lie
for life, suddenly you are questioning if its really worth making.

~~~
simias
Immutability is easy to achieve. Anything distributed widely enough is
effectively immutable. Anything published on the cover of Time magazine is
immutable. Anything commited to the linux kernel is immutable. Anything
distributed on thepiratebay is immutable. Anything put in the Ubuntu package
repository is immutable.

You can amend it and publish new versions but you can be sure that somebody
somewhere will have a copy. You want to make your paper trail immutable? Sign
it and publish it widely using any medium you want. Burn it on CDs and mail
them to random addresses. Tie them to balloons and release them.

~~~
nrhk
Man trusting paper more at this point is the most backward thing I've heard.
You really want us to keep using paper for all contracts, needing to be on
site to sign documents, sending documents through fax, making physical
backups... when all of it can be done digitally?

------
ppeetteerr
My question is if your conclusion is that blockchain is a solution in search
of a problem, what was all that effort being spent on (not just in finance,
but everywhere blockchain is being considered)?

I'm not saying that blockchain is not a valid solution to a problem, but as a
veteran of the online industry, I can say I've seen a lot of hype around new
technology, actual effort being put into it, and then the realization that the
effort was for nothing. Either the solution is no better than the old
solution, just different, or the solution is so obscure, that the cost of
maintaining it is greater than the value it generates.

In the end, the costs of the choices of these institutions are being paid for
by you and I, and I hope they don't go too deep into their project before
realizing: “Basically, it became a solution in search of a problem,”

~~~
rambossa
My major questions have always been: where is the business value in blockchain
applications? what can a blockchain app do that can't be done by non-
blockchain (beyond decentralization - bc I don't think this produces much
business value)?

~~~
onion-soup
Sending money without fees and delay? Have you ever tried a normal bank
transfer? How long did it take? Have you ever tried, say, nano? It literally
takes seconds and 0 fees. Here is some value.

~~~
ealloc
Bitcoin has both fees and delays. You can see what they are now:

[https://bitinfocharts.com/comparison/bitcoin-
transactionfees...](https://bitinfocharts.com/comparison/bitcoin-
transactionfees.html)

[https://blockchain.info/charts/avg-confirmation-
time](https://blockchain.info/charts/avg-confirmation-time)

Who knows what they would be if bitcoin was actually used to buy things.

~~~
nrhk
He's not talking about Bitcoin, do people realize there's literally 1000+
projects (Most irrelevant) with some clear innovation going on. We're already
way past bitcoin and PoW as the future of blockchain tech.

------
tudorconstantin
Of course banks can do it better with the traditional technologies. They
operate in a centralized, trusted and regulated environment. Their consensus
algorithm is "settling disputes in courts".

And still, it takes up to 5 days to receive a payment from USA in the EU and
the sender pays 40$ for the wire transfer.

The blockchain technologies will disrupt the banks themselves, because they
are the intermediaries in this industry. I can receive the equivalent of $1
mil in BTC from oversea in less than 10 minutes and the sender pays fractions
of a dollar in fees.

The banks will be in a tough position the more people accept payments for
their services and products in BTC. We're not there yet, of course, but who
knows where we'll be in 5-10-20 years.

~~~
JumpCrisscross
> _it takes up to 5 days to receive a payment from USA in the EU and the
> sender pays 40$ for the wire transfer_

U.S. dollar Fedwires are “immediate, final, and irrevocable“ [1] regardless of
from where they are initiated. If your EU bank takes 5 business days to swap
between the world’s two most liquid currencies, you have a uniquely shitty
bank.

[1]
[https://www.federalreserve.gov/paymentsystems/fedfunds_about...](https://www.federalreserve.gov/paymentsystems/fedfunds_about.htm)

~~~
mr_spothawk
> In 2008, approximately 7,300 participants made Fedwire funds transfers. The
> Fedwire Funds Service is generally used to make large-value, time-critical
> payments.

seems like maybe the crux of this discussion is that, all of the sudden the
features of banking have been automated. that’s definitely not the same as
“the features of banks, regulation, etc...” have been automated.

But certainly, we can see that the Fedwire is not a consumer product, where
BTC clearly is

~~~
JumpCrisscross
> _In 2008, approximately 7,300 participants made Fedwire funds transfers_

To be a Fedwire participant you have to be a Federal Reserve member, _i.e._ a
bank. Consumers arrange Fedwires through their banks. When I send a wire, I'm
not a Fedwire participant--my bank is. If you have a U.S. dollar bank account,
you have access to the international Fedwire system.

------
rsynnott
> The project, which had successfully tested with startup Digital Asset
> Holdings (DA), was shelved because banks and other potential users believed
> the same results could be achieved more cheaply using current technology, he
> said.

This is more or less the curse of the almighty blockchain; it's very hard to
think of a plausible, actually useful, application which can't be accomplished
far more cheaply and simply using conventional means.

~~~
kerkeslager
It's really not hard to think of useful applications for blockchain.

The problem HN has with blockchain is that a lot of HN users _are the problem_
which decentralization solves. The basic startup monetization strategies these
days revolve around centralizing user data and then collecting rent (usually
in the form of ads) or centralizing transactions and then collecting a
percentage. Decentralization is the antithesis of these models: you can't
collect rent or percentages if you don't have centralized control of the
platform. The problem blockchain solves is that it cuts out a lot of middle
men and what middle men it leaves (miners) have to compete.

For the vast majority of HN users, blockchain doesn't solve problems _you_
want to solve, but that shouldn't be mistaken for meaning that blockchain
isn't a revolutionary technology that solves a lot of problems. If anything,
the technology is important because it affects your future. Data and
transaction middle men are the problem that blockchain solves, and as middle
men you should be paying attention.

I don't hold any resentment toward people trying to run a centralized
business, but I do find it amusing when people are pushing blockchain forward
to their own detriment.

~~~
phpnode
> It's really not hard to think of useful applications for blockchain.

Then please list some useful, concrete applications of blockchain that would
not be solved better and cheaper by a normal database.

~~~
hapnin
The first sentence of the Bitcoin white paper describes a problem that can't
be solved by a normal DB.

"A purely peer-to-peer version of electronic cash would allow online payments
to be sent directly from one party to another without going through a
financial institution."

~~~
spookthesunset
> "A purely peer-to-peer version of electronic cash would allow online
> payments to be sent directly from one party to another without going through
> a financial institution."

Except it failed completely at that. The blockchain has proven through real
world use that it is unusable as a currency. By its very design, it is
fundamentally impossible to scale it to even serve even a moderate sized city
worth of transactions.

~~~
kerkeslager
> By its very design, it is fundamentally impossible to scale it to even serve
> even a moderate sized city worth of transactions.

1\. This is far from proven. Scaling is definitely a problem, but I don't
think it's at all been proven to be impossible.

2\. You still have to admit that bitcoin has solved this problem at a small
scale, which isn't nothing. Transactions without a trusted central authority
are literally impossible with previous technologies.

------
antsykarbo
Vast majority of projects don't need the complexity of a multi-master
geographically distributed append-only immutable database with uncertain
transaction finality because other, simpler and better understood solutions
already exist. Vast majority of projects don't have to deal with the Byzantine
Generals problem that makes it so difficult to create a permissionless
distributed value transfer system like Bitcoin.

Right tool for the right job.

------
jfasi
I get suspicious whenever I read about companies piling on to technology
trends, not least because of the damage it does to the rank and file
developers who work on it. The short version is: leaders got bamboozled and
their subordinates suffered, but it's a little more nuanced than that.

We tend to think of large companies as either these monolithic beasts that act
according to their own best interests, or as emergent hiveminds that move in a
direction because they smell money. These have the advantage of allowing us to
presume that the actions taken by these organizations were vetted by many
people and arrived at via consensus.

However, there is a third, less popular, way to view organizations, and that's
as an organ of a handful of people, if not one person. This is an important
framing because it allows us to consider the actions of these large companies
as reflecting the foibles of the individuals at the helm. Viewed this way,
Apple under Steve Jobs was an extension of one man's vision and design
priorities. Microsoft under Ballmer was an extension of one man's putting the
MBA approave above the tech approach.

I can't help but wonder if, within these Wall Street companies as well as
throughout SV, there wasn't a single person or a handful of people who
swallowed the blockchain coolaid and started these projects. Pitched high
hopes to developers. Hired developers. Set goals. Failed to meet goals. Made
their developers' lives miserable. Gave up. Blamed their subordinates. Moved
on.

This is a tale as old as tech itself, but somehow it just keeps happening. To
all young developers deciding where to invest their time and talent: be _very_
careful choosing to follow an individual, because individuals are stupid
enough to fall for nonsense like "blockchain for banking."

~~~
woah
What is the supposed persecution of developers you’re alluding to here?

------
hapnin
I've been hearing about imminent death of Bitcoin and the pointlessness of
blockchain since 2010. I predict that won't change in the future.

------
pxmpxm
DTCC is a central authority by definition; there's no amount of handwaving
that you can do to make a distributed quorum system fit this particular
problem...unless you're just trying to raise VC money.

------
sebringj
Isn't the core still being worked on? Meaning things like the lightening
network and proof of stake? There has been tremendous buzz about this tech
even in its limited state so imagine when it becomes very
friendly/usable/stable/focused/possibly efficient... in use case and where
things like Mt. Gox don't happen anymore. I think its a work in progress and
we are at the whim of the impatient and non-technical media.

~~~
throwawaylolx
It is. These speculation cycles come and go regularly. HN general knowledge of
blockchain is similar to HN general knowledge of AI: slightly above average.
There are many smart engineers laying down the foundations of the Bitcoin
protocol as we speak, and the hype cycle will come back.

~~~
c06n
You bought your crypto in December/January, haven't you?

------
mad44
I have been trying to see why full p2p decentralization matters, but am unable
to find much support for it.

[1] [https://muratbuffalo.blogspot.com/2018/03/change-my-mind-
abo...](https://muratbuffalo.blogspot.com/2018/03/change-my-mind-about-
why.html)

[2] [https://muratbuffalo.blogspot.com/2018/02/blockchains-
from-d...](https://muratbuffalo.blogspot.com/2018/02/blockchains-from-
distributed-computing.html)

The applications of full p2p decentralization are also not clear:

[3] [https://muratbuffalo.blogspot.com/2018/03/blockchain-
applica...](https://muratbuffalo.blogspot.com/2018/03/blockchain-applications-
in-supply-chain.html)

[4] [https://muratbuffalo.blogspot.com/2018/02/paper-review-
ipfs-...](https://muratbuffalo.blogspot.com/2018/02/paper-review-ipfs-content-
addressed.html)

~~~
chrisco255
[https://medium.com/@cdixon/why-decentralization-
matters-5e3f...](https://medium.com/@cdixon/why-decentralization-
matters-5e3f79f7638e)

------
segmondy
Wall Street only cares about money extraction. Blockchain projects are
currently milked dry with no where to squeeze out money. It's no surprise that
they are "rethinking" it. If it should start growing fat again with lots of
opportunities to extract money, Wall street will jump right back in.

~~~
prostoalex
They're fairly receptive to technologies that decrease their operating costs.

If there was a scenario where blockchain-based solution was cheaper to operate
than their current database tech, you'd think they'd be all over it.

------
_bxg1
So that iced tea company that announced it was entering the blockchain space
didn't pan out, hm?

------
cvaidya1986
Ron Conway, early investor in the internet, said recently that the Blockchain
is internet 3.0

~~~
haakon
I mostly hear it described as Internet 2.0, or Web 3.0. However, analysts are
starting to talk about Blockchain 2.0 now; this could probably fill the role
of Internet 3.0.

None of these people have any idea what they're talking about.

~~~
cvaidya1986
Trying to predict the future is tricky, however, you can try to see where it’s
all going without knowing all the details.

------
abbieseide
At the end of the day there are tons of practical applications for blockchain.
There is a lot that is staked on bitcoin and other cryptos and that will
probably decline until the blockchain's true value is hit. That being said
institutional investors will still want to play this market. JP Morgan and
Morgan Stanley are still planning to build clearing houses for crypto this
summer.

[https://altcoinreport.co/morgan-stanley-clear-bitcoin-
future...](https://altcoinreport.co/morgan-stanley-clear-bitcoin-futures-
clients-2018/)

------
soneca
I think blockchain is like 3D movies. It is intriguing enough to put the foot
on the door of public imagination so people with vested interests have a crack
to keep pushing their agenda through.

------
speedplane
I've never understood why large companies want to get into blockchain. At
best, a distributed ledger (blockchain or not), is able to provide a
trustworthy database that anyone can engage with. Large banks also provide a
trustworthy database, but which only they can edit. With blockchain, the trust
is built upon protocols and technology. With banks, the trust is built upon
reputation and insurance. They seem in direct competition with each other.

~~~
lucozade
There’s probably not a lot of interest for retail use for the reasons you
state. Outside of wealth management that is more about the cryptocurrencies
than the tech.

But there is still interest in peer to peer usage. When each bank keeps their
own version(s) of the truth, the cost of reconciling, resolving disputes etc
is huge.

The most interesting features, in this scenario, are the mutable->immutable
and time ordering aspects. The literal blockchain, in other words. The
consensus and transparency aspects aren’t particularly interesting though.

And the key (excuse the pun) to these useful aspects is the cryptography used
in interesting ways. Blockchains didn’t invent any of this stuff but they did
open people’s eyes to the possibilities.

~~~
speedplane
> When each bank keeps their own version(s) of the truth, the cost of
> reconciling, resolving disputes etc is huge

I'm not a banker, but I'm not sure I entirely believe this. There is
undoubtedly a cost of reconciliation, but is it "huge"? Seems low on the totem
poll.

~~~
lucozade
10s of millions per year per bank. More for the really big banks.

Thay have large totem poles.

Edit. That’s not including the op risk of screwing up. That has costs too and
can easily reach millions

~~~
speedplane
A handful of millions for the largest banks, yet most crypto currency
companies are valued far out of proportion of that.

------
kyloon
Basically the finance industry is trying to shoehorn their legacy business
systems into blockchain, which of course will not make any advantage obvious
other than finding out it is much more difficult to reimplement what is
already working with a different system. My view on this is that blockchain
ought to find a very specific problem (e.g. trust as a service) that cannot be
achieve with existing technology.

------
drieddust
Looking at the history of Wall Street, it should be safe to predict that Block
chain technology will be the reason for next global meltdown. They can and
will do wonders generating derivates after derivates and make huge bonuses.

I have never understood why financial instruments like derivates like options
etc. exists. I understand what they do but I do not understand what value they
add to the economy specifically.

~~~
paulgb
If you agree with the premise that regular equities markets provide value (in
that competitive allocation of capital leads to a more optimal result than
centralized allocation), it seems to follow pretty naturally that derivatives
and options provide value by allowing participants in the market to turn more
nuanced beliefs into a position than they could otherwise.

------
arisAlexis
wall street is buying now from panic selling grandmothers that entered in
December. it has always been like that in immature markets.

~~~
misja111
The article is about blockchain projects. Not about people selling their
bitcoins.

------
granaldo
The great correction is here
[https://www.coingecko.com/en](https://www.coingecko.com/en) shows total red
Everyone needs to start waking up. Blockchain solves transfer of value really
well, took years for it to prove that it works. What has the other projects
proven?

------
craigc
I would take any article like this with a grain of salt. There is not a lot of
useful or technical information here, and I believe it is more designed as
click bait and FUD to create shock value and hurt the public sentiment about
Blockchain technology and investing in crypto currencies.

That said, on the flip side, a lot of people have been considering Blockchain
as some kind of magic solution to all of the world’s problems, and that is
also very far from reality. If it takes an article in Reuters for people to
realize this than so be it.

I have believed for a while that Blockchain technology in the context that
many big companies refer to it is not very useful. Usually these are the same
people who claim that Bitcoin is useless and Blockchain technology is where
the real value is. I think they are either mistaken or misinformed.

In my opinion, anyone who plans to build a centrally controlled Blockchain is
making a mistake. Even if the data is signed/hashed and distributed, it only
takes one bad actor inside the organization who has access to the nodes to
alter the Blockchain by performing a 51% attack (changing the transaction data
on more than half of the nodes). Therefore the entire idea of a Blockchain
being immutable is thrown out the window. You would be much better off using
an open source database like MySQL or Postgres or Mongo. Blockchains are
expensive to run and operate and are extremely slow.

However, the idea that Blockchains are a solution in search of a problem that
the article suggests is also a bit misleading. I think it’s more likely that
these companies are trying to find solutions for things that aren’t problems
in the first place which isn’t the fault of Blockchain technology itself. I
feel pretty strongly that blockchains have already solved a few problems.

\- They solve the double spending problem (the idea that the same tokens can
be spent more than once)

\- They allow people to store value without depending on any third party (such
as a bank)

\- They remove all the intermediaries required for sending payments/data from
one person to another.

\- They make it cheaper and faster to send any amount of money to anyone in
the world

To me, those are all transformative properties of blockchains, and anyone who
overlooks them is somewhat missing the point. That said, in order to check off
all these bullet points, you need to have a peer to peer, decentralized
network where peers are rewarded with crypto currencies for securing the
network, not just a few servers running inside of a company as a replacement
for a centralized database.

Will there be good Blockchain applications outside of crypto currencies? I’m
not sure, but to me, there is nothing wrong with that. If, in the future,
banks and cash become obsolete and everyone stores their money on their own
secure, digital wallets, then I would say that Blockchain technology changed
the world for the better.

~~~
52-6F-62
> _I would take any article like this with a grain of salt. There is not a lot
> of useful or technical information here, and I believe it is more designed
> as click bait and FUD to create shock value and hurt the public sentiment
> about Blockchain technology and investing in crypto currencies._

There's a wave of this sentiment lately— which is funny timing. Goldman Sachs
apparently will have an operational cryptocurrency trading desk by the end of
June.[0]

The TSX is slated to have a cryptocurrency brokerage desk with backing of the
Bank of Montreal over the coming months sometime as well.[1] This came out
days after BMO blocked all cryptocurrency purchases with consumer credit and
debit cards.[2]

The more cynical side of me wants to guess that they're trying to establish a
gatekeeping initiative. Knock everybody about, then when they want back in
they have to come through you.

[0]
[https://www.bloomberg.com/news/articles/2017-12-21/goldman-i...](https://www.bloomberg.com/news/articles/2017-12-21/goldman-
is-said-to-be-building-a-cryptocurrency-trading-desk)

[1] [https://www.newswire.ca/news-releases/tmxs-shorcan-
announces...](https://www.newswire.ca/news-releases/tmxs-shorcan-announces-
cryptocurrency-initiatives-677670313.html)

[2] [http://business.financialpost.com/pmn/business-pmn/bmo-
stops...](http://business.financialpost.com/pmn/business-pmn/bmo-stops-
allowing-credit-and-debit-cards-for-cryptocurrency-purchases)

~~~
craigc
That’s a pretty interesting perspective. I have definitely been thinking for a
while that they are trying to drive the general public out so that they can
accumulate more for cheaper, but I never considered the idea that they want
you to use THEIR tools.

It actually makes a lot of sense cause the SEC has also been going pretty hard
lately to try to shut down trading of tokens that had ICOs and to make life
difficult for current exchanges.

I have always believed that Wall Street does not like the fact that the
regular public got first stab at crypto currencies, and they didn’t. This
could be their way to try to rectify that.

------
dqpb
If projects we're ever based on the market price of bitcoins, then they were
ill-founded.

If projects we're based on the technical features of a block chain
architecture then the decline of euphoria is irrelevant.

------
misiti3780
So what does that mean for companies like this
[https://axoni.com/](https://axoni.com/)?

------
chris123
This is part of their learning process. Like with the Internet. Eventually
they will figure it out.

------
wol_
blockchains have been on their way out since 2009.

