Follow Slashdot stories on Twitter

 



Forgot your password?
typodupeerror
Compare cell phone plans using Wirefly's innovative plan comparison tool ×
Bitcoin Networking The Almighty Buck

Bank Consortium Successfully Tests Bitcoin Tech (thestack.com) 47

An anonymous reader writes: R3CEV, a startup dedicated to bringing blockchain technology to traditional finance, yesterday ran a successful test of transactions between 11 of the world's largest financial institutions. This represents a big step forward in bringing blockchain, the foundation for Bitcoin, to traditional banking. The test, which connected the banks on a private 'distributed ledger' using Microsoft's cloud-based Azure service, allowed participants to execute sample financial transactions instantly, globally, and without a centralized third-party clearing house. Participants included Barclays, BMO Financial, Credit Suisse, HSBC, Royal Bank of Scotland, TD Bank, UBS, and UniCredit among other leading financial groups.
This discussion has been archived. No new comments can be posted.

Bank Consortium Successfully Tests Bitcoin Tech

Comments Filter:
  • by Adeptus_Luminati ( 634274 ) on Thursday January 21, 2016 @11:34AM (#51343771)

    It's ok, you utter the word, the secret's out now... Anyone seriously looking at "blockchain" technology is considering using Ethereum (aka bitcoin 2.0), not Bitcoin, including R3 CEV in the linked article. The ability to script transactions in bitcoin is fairly limited and not flexible. Yes there are ongoing ventures and ideas to work around that: side-chains, blockstream, colored coins, rootstock, etc, but these are all non-existent for production use at this time. Ethereum launched 6 months ago and can be used now, although it has far less time in the open than bitcoin (6 months vs ~7 years), so from a security perspective, it still needs to prove itself. Meanwhile, research teams of organizations can start testing it. Where Bitcoin can disrupt the financial sector, Ethereum can disrupt finance and "everything" else.

    • by rock217 ( 802738 )
      Personally, I'd rather not have the built in scripting language for my cryptocurrency be turing complete. Enjoy blindly executing...whatever comes across your blockchain.
    • by Anonymous Coward

      So, like BitCoin, all these transaction changes have to be kept? For example, if you want protection better than "trust me" with BTC, you have to download and parse the entire 67 gig Bitcoin blockchain ledger for every transaction. Not doing so pretty much ensures you can be a victim of double spending.

      It would be nice to not have to go through every single transaction done in a cryptocurrency to ensure one is covered.

      • by GuB-42 ( 2483988 )

        If you trust no one, sure, you need that 67 gig ledger and the matching decent connection. It is likely to be too much for a smartphone but it is well within reach of home PCs.
        However, the only ones that really need to do this check are people who sign the transaction, i.e. the miners. They could not do the checks but they better do, because otherwise, they are likely to get rejected by other signers and lose their rewards. In a normal transaction, several confirmations may be required, which make double sp

      • They've got a consensus algorithm (Casper) in the works which is a vast improvement over how Bitcoin handles blockchains, and has the nice added benefit of requiring that you only keep recent parts of the blockchain handy. To summarize how trust is accomplished: Anyone validating blocks (note that it's not traditional PoW mining in this case) has to post a bond which is forfeited in the event of any attempt at a double spend given there's cryptographic proof of malicious behavior. Thus you need only have
    • It's a shame it wasn't mentioned in the abstract.
  • by Anonymous Coward on Thursday January 21, 2016 @11:40AM (#51343825)

    The blockchain is not the key innovation behind Bitcoin. The block chain concept existed long before Bitcoin and was then known as "eternal log file". The problem with eternal log files was authenticity: Prior to Bitcoin, in order to make sure that you had an untampered version of the eternal logfile, the maintainer of the logfile would regularly publish hashes in ways that were deemed immutable. For example, one could print the current cryptographic hash in a daily newspaper with wide enough circulation that it would be infeasible to tamper with all archived copies. Obviously this process is slow and leaves the logfile open to manipulation for long times between publication of hashes. Bitcoin solves this authentication problem without trust, without a central entity and without long periods where entries to the logfile (or blockchain) could be modified. This is the key innovation of Bitcoin.

  • I highly divisible universal currency being tested by banks. Might not be a horrible idea. Remove the necessity for currency exchange markets. If you economy is tanking, the price of goods increase but based off of a universally monitored and controlled currency with a specific market value. I don't necessarily like the idea of the value of the currency fluctuating independently of a given nations inflation, but the idea still would have merit to investigate.
    • I highly divisible universal currency being tested by banks. Might not be a horrible idea. Remove the necessity for currency exchange markets. If you economy is tanking, the price of goods increase but based off of a universally monitored and controlled currency with a specific market value. I don't necessarily like the idea of the value of the currency fluctuating independently of a given nations inflation, but the idea still would have merit to investigate.

      I personally think it is a horrible idea. On the plus side I don't know of any banks that are interested in doing something like that.

      If you are confused, the banks are only testing the "ledger" ability of block chains, not the "currency" aspect. The idea is that a block chain would be associated with asset (stocks, bonds, gold, whatever) and this asset could be traded directly between institutions and people without a trusted intermediary (a.k.a. the middle man). One interesting application, which boarder

  • by rickb928 ( 945187 ) on Thursday January 21, 2016 @11:46AM (#51343881) Homepage Journal

    Because when I read " instantly, globally, and without a centralized third-party "

    I think of the blockchain as the centralized third-party.

    It's just not so physically defined as a nice clean data center some entity built, managed, and charges fees for.

    • by pla ( 258480 )
      It might make more sense to think of the blockchain not as "a" third-party, but rather, the aggregate universe of third-parties.

      No one "owns" it, no one controls it, no "master" copy of it exists anywhere. Instead, it exists as a distributed collection of every BTC transaction ever made, with each distinct block contributed by a random miner.

      Or put another way, fish need water to live. You can't really call the ocean a "third party" to their life-cycle.
      • by Anonymous Coward

        The independence of the blockchain assumes a sufficiently decentralized mining population. Sufficient coordination and the blockchain has a clear owner (cluster). Much like capitalism, blockchains only work properly when the major players are not willing to cooperate. This does not mean that any cooperation will immediately destroy the usefulness of either, but that large scale cooperation can potentially undermine the interests of other participants.

  • by Anonymous Coward

    R3CEV announces they've successfully completed their testing (bitcoin for banks)

    A few days ago - global headlines - "Bitcoin a failure" - NY Times headline article.

    The person writing "bitcoin a failure" works for R3 - funded by the banks. He single handedly tried to disrupt bitcoin with XT and other approaches.

    Am I following this correctly?

    I think alternatives and better solutions to bitcoin will come up - but there is something unsavory about this whole Mike Hearn thing.

    • Blockchain != Bitcoin.
      The blockchain concept could be a success at the same time that bitcoin fails completely.
    • by rgbscan ( 321794 )

      The purpose of this new blockchain is to cut out the Fed and ACH system middlemen (and associated fees) to settle funds between banks. Chase customers may write checks to BoA customers. BoA customers also write checks to Chase (and so on). At the end of each day, banks need to settle up with each other and transfer funds to make up the difference. The distributed ledger will be used for this purpose, where previously settlement funds would be routed through the Fed or the ACH system at a cost.

      It will not be

      • by TyFoN ( 12980 )

        Chase customers may write checks to BoA customers. BoA customers also write checks to Chase (and so on).

        OT: Does people in the US actually use checks still? I haven't seen one since the late 80s here in northern Europe.

        • Chase customers may write checks to BoA customers. BoA customers also write checks to Chase (and so on).

          OT: Does people in the US actually use checks still? I haven't seen one since the late 80s here in northern Europe.

          Yes. While I pay most of my bills electronically through my bank's bill-pay service, I still pay those one/few-times-a-year bills with a check and my various property tax bills with a check so there's a hard-copy trail. My wife used to pay for groceries with checks, but since she died in 2006, I basically use a CC for everything (or cash) and pay off the card every month.

  • by brxndxn ( 461473 ) on Thursday January 21, 2016 @12:34PM (#51344285)
    When networking was first developed, TCP/IP emerged as the most-used standard. Once it started catching on, numerous proprietary protocols were developed where companies tried to take control - but TCP/IP ended up as the standard. It did not end up as the standard because it was the best; it ended up as the standard because it had the most existing infrastructure, investment, acceptance, and understanding. Since TCP/IP was developed, the TCP/IP technology has moved forward and been adapted as needed. I believe the same will happen with Bitcoin. Bitcoin is merely a protocol for currency. Every other alternative virtual currency - whether it offers a better feature set or not - is behind Bitcoin in terms of infrastructure, investment, acceptance, and understanding.

    These banks are simply butthurt that their do not control Bitcoin so they believe they can build an alternative that they control so they can compete against it. There is zero value in the banks' protocol for anyone other than the banks. Whereas, Bitcoin will have value for anyone and everyone that invests in it or uses it. So, unless the banks open up their protocol to the public, like Bitcoin, and allow people to innovate and make money on their platform, Bitcoin has it beat.

    IMO, it's fairly stupid to not have a tiny speculative investment in Bitcoin at this point. But then again, I feel stupid for not investing in Google when I had the chance and knew it was the standard for search.

  • If they don't call it credits.

  • ... and without a centralized third-party clearing house.

    You mean without that thing you used?

    The test, which connected the banks on a private 'distributed ledger' using Microsoft's cloud-based Azure service,

    Granted, you rented the cloud service yourself, for yourself, but still...

Failure is more frequently from want of energy than want of capital.

Working...