
Blockchains, Teens and Hedge-Fund Hotels - edward
http://www.bloombergview.com/articles/2016-03-30/blockchains-teens-and-hedge-fund-hotels
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kchoudhu
Does _anyone_ trust back office developers at major banks to implement a
cohesive, industrywide blockchain-based replacement for 30 or 40 years of
settlement and clearance technology?

I sure as hell don't, and I work in the space: we'll get too distracted
writing AbstractBlockchainFactoryFactories to do right by the problem.

~~~
ChemicalWarfare
"trust" is too strong of a word here (do you trust that your bank has their
act together 100%?), but I don't see how these developers would be less
trustworthy than the bitcoin core dev team or ripple labs etc etc.

If anything, the banks and financial industry in general are reasonably rigid
and not very interested in chasing "the next best thing" just for the sake of
it.

A very obvious outcome of this approach is the ridiculous amount of time it
takes to clear an ACH transaction domestically for example.

I guess my point is when it comes to implementing changes the banks are no
less trustworthy then most of the other players in the financial industry.

~~~
jessaustin
_...the ridiculous amount of time it takes to clear an ACH transaction
domestically for example._

My impression is that this has more to do with banks' desire to book
transactions at just the right time (e.g. to maximize fees charged or minimize
leverage ratio) than with technical limitations.

~~~
ChemicalWarfare
ACH flow is basically a set of batches executed by the parties involved in a
sequential manner, taking about a day each with cutoff times sometimes as
early as 2PM EST to boot. This system dates to the 70s.

Mexican SPEI system for example is almost real time (they too have a cut off
time I think it's 5 PM EST).

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nissimk
1) Innovation of bitcoin is proof of work, not a chain of blocks. 2) credit
crunch for unicorns is troubling. we should all be worried about where this
can lead.

~~~
wraithm112
> Innovation of bitcoin is proof of work, not a chain of blocks.

Proof of work was invented in the late 90s by Adam Back. The consensus
algorithm using proof of work and a blockchain is what Bitcoin brought to the
world.

~~~
onnoonno
> Proof of work was invented in the late 90s by Adam Back. The consensus
> algorithm using proof of work and a blockchain is what Bitcoin brought to
> the world.

Wikipedia disagrees:

> The concept may have been first presented by Cynthia Dwork and Moni Naor in
> a 1993 journal article.

Adam Back invented hash cash as one form of POW.

~~~
wraithm112
True, I was wrong. Thank you for the correction.

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_jeb_
I'm interested to hear Digital Asset's explanation of why a blockchain is an
appropriate technical tradeoff in an industry with a central clearinghouse.

~~~
tristanj
They've written a whitepaper explaining their reasoning, listing over a dozen
benefits. [https://www.finextra.com/finextra-
downloads/newsdocs/embraci...](https://www.finextra.com/finextra-
downloads/newsdocs/embracing%20disruption%20white%20paper_final_jan-16.pdf)

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Animats
I'm surprised DTC is pushing this. If it catches on, DTC becomes obsolete. DTC
is a centralized clearing house not tied to any single bank. That's the
traditional way to get a combined ledger between mistrustful parties.

Maybe that's why DTC wants to control the technology. What they're apparently
doing first is applying a distributed ledger to some kinds of big, reasonably
infrequent trades that are currently a headache.

~~~
trhway
>centralized clearing house not tied to any single bank. That's the
traditional way to get a combined ledger between mistrustful parties.

somehow reminded about opening pages of Cryptonomicon describing an
alternative to centralized clearing house. I think that the new block-chain
tech being developed by the banks would look and feel surprisingly pretty much
the same as the one described by NS :)

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bboreham
> DLT may be able to provide regulators with visibility into the trading
> portfolios of swaps counterparties that they lacked during the financial
> crisis and that Dodd-Frank mandated.

Err, except, as you said, Dodd-Frank mandated that visibility, and banks have
been reporting their swap portfolios for around 3 years.

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brighton36
These non-work blockchains are really scammy. Anyone around here have a
journaled database that's not selling? Call it a blockchain, and wall street
will open its wallets.

~~~
jaekwon
I can't speak for anything else out there, but Tendermint is about providing
real accountable BFT middleware.

[https://github.com/tendermint/tendermint/wiki/Byzantine-
Cons...](https://github.com/tendermint/tendermint/wiki/Byzantine-Consensus-
Algorithm)

Calling this a journaled database is an understatement.

~~~
brighton36
Hello jaekwon :)

