
Microsoft and Bank of America collaborate with Azure Blockchain as a Service - spydum
https://news.microsoft.com/2016/09/27/microsoft-and-bank-of-america-merrill-lynch-collaborate-to-transform-trade-finance-transacting-with-azure-blockchain-as-a-service/
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0x0
What's the point of a private blockchain? Who are you competing against with
your hash rate? And if you are keeping it private to stay in control, why
choose a technology designed to not let you stay in control?

I've heard buzz about "enterprise blockchains" several times, but I still
don't understand what this brings that an authenticated REST service on top of
an SQL database doesn't.

~~~
pjc50
Presumably you'd ditch the proof-of-waste system entirely and just have a
short whitelist of keys allowed to post to it.

It sounds like a means of getting a distributed database that actually works,
with no central admin. That's no small thing.

~~~
brighton36
Proof of Work is the process by which registered value (an electric bill) is
converted to fungible value. It is nearly 100% efficient (depending on how you
quantify waste).

If you don't like the externality costs of mining - I'm with you. But that's
the government's job to manage, and seemingly, they're ok with that. They even
subsidize the network by requiring that some goods only be purchased via
blockchain.

~~~
danbruc
_Proof of Work is the process by which registered value (an electric bill) is
converted to fungible value. It is nearly 100% efficient (depending on how you
quantify waste)._

That is not true. The proof of work is the mechanism required to prevent users
from casting arbitrarily many (fraudulent) votes on blocks because Bitcoin is
anonymous. If Bitcoin were not anonymous, you could just give one vote per
block to every user and everything would be fine. But Bitcoin is anonymous and
the proof of work essentially only replaces knowing all users by making it
hard to cast a vote and in consequence even harder to cast many. So the proof
of work is logically the component in Bitcoin establishing some kind of
identity for users and has nothing to do with the creation of value.

~~~
digi_owl
Proof of work also gives goldbugs that warm and fussy...

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lordnacho
I've yet to see a sensible use for what I consider to be an impressive
achievement, the blockchain concept.

So, what does it give you? An immutable, distributed, public database that can
be trusted despite not having trust in any particular participant.

Now, if you're a bank, why have you got offices with marble floors in the
nicest neighborhoods? Why do your employees wear suits and ties? Why do you
get a credit rating?

If you want security, that already exists. You can use encryption to identify
people, and you can use it to hide sensitive information. You can use it over
public channels, no problem. For instance this forum is on an encrypted https
connection, and people can't sit on the route between me and YC to find out
what I'm up to.

If you want a ledger, that's also been done. In fact you can use encryption to
make sure there's never an unauthorized change to the ledger. And there's a
whole load of ways that ledger can be scaled so that many people can use it at
once.

Someone mentioned settlement of trades as a potential use case. But what is
really to be gained against the way it is currently done? At the moment, you
have a bunch of ops guys settling trades in the way it's been done for many
years. If there's an error, you can call someone one the other side and fix
it. Mostly, it's automatic, done by various cron jobs. What do we get from
putting that in something similar to bitcoin?

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atemerev
The current system implies that international banks and other financial
institutions trust each other (or a designated neutral party), and it becomes
increasingly hard to maintain that trust. (E.g. in light of recent attack of
North Korea on Bangladesh central bank).

Blockchain, in essence, is just a voter protocol that can deliver trusted
consensus in adversarial (Byzantine) environment. This is its main value
proposal for international finance.

I'd also like to see a blockchain-based public voting and election protocol.
But there seems to be not enough governmental interest in that ;)

~~~
ProblemFactory
In the Bangladesh central bank case, hackers broken into their internal
networks, got access to payment credentials, and issued $950 million worth of
transactions.

$850 million was blocked before they went through, and about $40 million of
the remaining has since been recovered.

How would a blockchain have helped in preventing or recovering from this
attack? If the hackers got access to their blockchain credentials, they would
have been able to issue similar transactions. It would just have been much
harder to block the transactions or reverse and recover them after the fact.
It seems to me that running this on a blockchain would have made things worse,
not better.

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onestone
Btw, the blockchain in question is Ethereum. Source:
[https://twitter.com/HiroMarleyG/status/780713683022442496](https://twitter.com/HiroMarleyG/status/780713683022442496)

~~~
sidko
Just to clarify, this is NOT Ethereum, it is a fork of Ethereum, also referred
to in that tweet reply as 'private Ethereum'. There is nothing called 'private
Ethereum' \- all Ethereum transactions are public. But lots of these
enterprise blockchains fork from Bitcoin or Ethereum and create their private
versions. This doesn't use ETH/ETC.

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Eliezer
I'm sorry, but seeing the phrase "blockchain as a service" has been the final
straw causing my sanity to snap.

brb, murder spree

~~~
brighton36
I'm with you

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csbrooks
When they rolled out ECoin in Mr Robot, I thought it was a stretch...

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spydum
Seriously when I saw the announcement this morning, the Ecorp logo all of a
sudden made sense.

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Osiris
This is really interesting. I wonder if they would work to try to create a
standard? If every bank creates their own blockchain system, that would only
perpetuate or complicate inter-bank transactions.

~~~
wyldfire
I think this will come eventually. Ultimately I think they want to use the
blockchain concept in order to make settlement easier. _Ideally_ this should
mean that a bank's retail and commercial customers should never know that
settlement is taking place using a blockchain. Though there's always
exceptions.

Bitcoin delivers value in that its blockchain is secured by mutual
participation among miners, exchanges, buyers and sellers, etc. All of these
new commercial, independent "blockchain technology" buzzword press releases
can only succeed if they can attract and sustain a critical mass of
participants who have mutual interest in its success. It's not for me to say
that they can't do that, I'm sure they can. But there will be many offerings
over the next few years before a VHS/Beta or HD-DVD/BluRay battle of titans
can emerge.

EDIT: disregard most of this, according to comments elsewhere they're using
Ethereum. _shrug_

EDIT: re-regard most of this, apparently it's a private instance of Ethereum
(IMO this is similar to Bitcoin's same-PoW altcoins).

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polskibus
What does azure blockchain do? How is it related to Bitcoin? Isn't the whole
point of blockchain the fact that it is a distributed ledger and centralizing
it in one point like Azure reduces its appeal?

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Everhusk
Basically, it is a click-to-deploy blockchain node to the cloud. Saves the
time of having to set all that up for yourself when you are building
blockchain apps.

~~~
polskibus
Yes but is it Azure-specific blockchain which isn't compatible with sth like
ethereum?

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Animats
Does the BofA "Azure Blockchain" have voting non-BofA nodes, or is it BofA-
controlled? Suppose BofA wanted to roll back a transaction? Whose permission
would they need? Is this the same blockchain as the HSBC/BofA blockchain
intended for use for trade finance?

There's a use for a blockchain where the voting members are, say, the top 20
banks worldwide. It would be tough to get more than half of them to agree to
change something. If half of them agree to change something, it probably
really needed to be changed.

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sanswork
When you know all the participants you don't need to roll back the chain you
can just call the other side and tell them to add the inverse transaction. If
they won't do it you have the courts to make them.

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dmak
I'm not really familiar with the whole blockchain topic for banks. Could
anyone out there explain it to me or direct me to some resources? Thanks in
advance.

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senthilvs
is this gonna be compatible with (ripple)
[https://interledger.org/](https://interledger.org/) ? or yet another
specification ?

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barisser
Sorry but if Microsoft is doing it.... it's probably not going to be great.

