Blockchain Technology Could Save Banks $12 Billion a Year (silicon.co.uk) 109
Mickeycaskill quotes a report from Silicon.co.uk: Accenture research has found Blockchain technology has the potential to reduce infrastructure costs by an average of 30 percent for eight of the world's ten biggest banks. That equates to annual cost savings of $8-12 billion. The findings of the "Banking on Blockchain: A Value Analysis for Investment Banks" report are based on an analysis of granular cost data from the eight banks to identify exactly where value could be achieved. A vast amount of cost for today's investment banks comes from complex data reconciliation and confirmation processes with their clients and counterparts, as banks maintain independent databases of transactions and customer information. However, Blockchain would enable banks to move to a shared, distributed database that spans multiple organizations. It has become increasingly obvious in recent months that blockchain will be key to the future of the banking industry, with the majority of banks expected to adopt the technology within the next three years.
... move to a shared, distributed database ... (Score:2)
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It's also very hard to have privacy.
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That's why if you give someone your wallet so you can accept a payment, they have your home address and SSN.
You don't seriously believe that do you?
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unless, of course, you manage to get a majority of the people to record it incorrectly... but gee, that's impossible, right?
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unless, of course, you manage to get a majority of the people to record it incorrectly... but gee, that's impossible, right?
Nothing's impossible. However, the relevant question would be, is it harder to subvert a blockchain-based system (where you need subvert "a majority of the people") than the current system (where you need to subvert only one person, as long as it is the right person)?
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unless, of course, you manage to get a majority of the people to record it incorrectly... but gee, that's impossible, right?
I do hope you're being sarcastic; it's easy to imagine an implementation of replication with a security hole that allows a falsified entry to propagate to all the nodes quickly and efficiently.
Re: ... move to a shared, distributed database ... (Score:1)
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If you broadcast something everywhere, and people record it everywhere, it's very hard to go back and forge the past of that decentralized record.
True, but proof-of-work blockchains are a *really* expensive way to achieve the goal. It is far cheaper to have both parties just cryptographically sign a transaction and keep a copy themselves or even post it to a public repository.
Blockchains solve the double-spend problem. Great, but banks don't typically have that problem in the first place because the currency is not the record.
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...Blockchains solve the double-spend problem. Great, but banks don't typically have that problem in the first place because the currency is not the record.
Based on fractional reserve banking banks have way more than a double spend capability. They have ~33x spend capability.
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This is what bitcoiners actually believe.
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Blockchains solve the double-spend problem. Great, but banks don't typically have that problem in the first place because the currency is not the record.
It could be another strategy for getting to a cashless economy. If the money is digital it can be cut off, confiscated, or pretty much anything the controlling authority decides. The only way it would be allowed to go forward is if there's a way for government to control and track it.
Strat
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True, but proof-of-work blockchains are a *really* expensive way to achieve the goal.
Bitcoin is based on "proof-of-work", but the banking blockchains are not implemented that way. They are much less computationally expensive. Anyone can mine bitcoins, but the banking blockchains are only accessible (or at least writable) by members of the club. If you don't have a SWIFT code, then you don't have access.
Innovation, absence of, banks from (Score:1)
Blockchain - worth billions.
Did any bank invent it? nope.
Innovation does not come from encumbents.
Re: Innovation, absence of, banks from (Score:5, Funny)
When incumbents get fat and lazy and start slowing everything down, they become encumbents.
Re: Innovation, absence of, banks from (Score:5, Funny)
You should at least tell him how to spell it correctly:
encumbanks
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cucumbanks jokes in 3...2...1... ;-)
Sounds familiar (Score:5, Insightful)
I remember, back in the day, when ATMs were first proposed. They would save the banks soooo much money. They could have fewer employees since now their customers could get to their money whenever they felt like it. There would be less paperwork, shorter lines, the benefits were endless.
Which is why you are now charged to get your own money if you're not using your own bank's ATM.
I wonder what money-grabbing scheme banks will implement if they start using blockchains?
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Re:Sounds familiar (Score:5, Insightful)
It's hard to charge a user for a back-end system.
Said no bank executive, ever.
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It's hard to charge a user for a back-end system.
Said no bank executive, ever.
FWIW, I've heard bank executives say pretty much exactly that. Typically they don't say "charge a customer", they couch it in other terms like "recoup investment", "generate revenues", etc., but they definitely say it, because it's true.
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No it's not. It's just listed as an obscure fee in your account contract that most will never read.
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The biggest credit union in North America (260 billion in total assets) has become much worse than banks.
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https://www.desjardins.com/ca/... [desjardins.com]
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ah, but how is it worse than a bank?
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Never mind, it was just a publicity stunt.
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Deal with the small, local community oriented ones ;-)
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Easy: a new encryption fee, justified by the fact that encryption is CPU intensive and cost a lot of electricity.
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Not that they bear the burden of that $12b. We get to do that for them (where do you think those ATM fees came from?), plus a little extra, because banks treat us like shit and there's nothing we can do about it. They inflate their costs and pass them directly onto us - so saving money might actually lower profits. If something cost them $12b, they were probably c
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Which is why you are now charged to get your own money if you're not using your own bank's ATM.
Really? That is legally allowed where you live?
Why should I care again? (Score:3)
Unless I own a bank, it's not like I, as a regular consumer, will see any benefit. The savings are all going to go into the pockets of a few fats cats who don't really need the extra money anyway.
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"s 100% available to spend, immediately. Of course if it were to somehow bounce or be recalled,"
Then it's not liquid and your bank is just fucking you.
With modern computing, even taking the batch processing of banking transactions into account, there is zero reason why a bank account should ever be overdrawn. It's just fuckery from the banks to fuck with the poor people who spend their paycheque every month. It's fucking disgusting that we tolerate it as a community.
I've always wanted to start a political m
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Quoting parent so it will be seen by more Slashdotters, because I believe it's an important point of view.
"s 100% available to spend, immediately. Of course if it were to somehow bounce or be recalled,"
Then it's not liquid and your bank is just fucking you.
With modern computing, even taking the batch processing of banking transactions into account, there is zero reason why a bank account should ever be overdrawn. It's just fuckery from the banks to fuck with the poor people who spend their paycheque every month. It's fucking disgusting that we tolerate it as a community.
I've always wanted to start a political movement to decree that "a bank account" is now a basic necessity, like water, power, electricity, and to some extent, internet. As such, banks should be forced to offer a basic account entirely free of charge. What I consider reasonable would be free online access, free ATM use (own bank only), free over-the-counter withdrawals, no overdraft, no credit, no bullshit. Sounds good doesn't it. When banks are making huge profits, why the fuck can't we get this going?
I was thinking along similar lines just a few days ago when I was looking at my transaction record and noting how badly I was being hosed by totally spurious 'service fees'. Back when all of the tracking and calculation was done manually by paid employees, banks still paid interest on even a few dollars in a savings account. Now that the tracking is done by computers and costs WAY less than it did 50 ye
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we ought to be treating the perpetrators the same way we treat any other scammer, thief, or con artist
Electing them President?
That would be funny, if it wasn't so pointedly true.
Re:Why should I care again? (Score:5, Informative)
Actually, this has happened in the UK. I don't think it was legally forced but was more a suggestion from Government ("do it voluntarily or we'll force you"). The reasoning was a bank account is a basic requirement of living in the UK and not having one was making life more expensive for poorer people.
The banks don't push them so you have to ask. And like you suggest you get none of the bullshit - no overdraft, no credit but full online banking, over the counter, etc. And on the plus side, you get no overdraft, no credit and hence no charges.
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Have you ever used Bitcoin or any other blockchain-based cryptocurrency?
Bitcoin is fucking slow. It can take around 10 minutes for a transaction to end up in a block, and then additional time for however many confirmation blocks are desired/needed after that. Having to wait 10 minutes, or even 30+ minutes, before a transaction can be considere
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Currently our banking system confirms transactions
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My broker sent money via ACH to my credit union. They sent it four days ago, and it just arrived today. Bitcoin doesn't take weekends or holidays. An hour or less to fully confirm a transaction is like lightning compared to the traditional banking system.
Note that ACH means Automated Clearinghouse i.e. the money is sent via computers. And it still takes up to 4 days.
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Maybe at the First National Bank of Podunk. My bank is only regional and yet I don't have the waits you claim.
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The US. When I transfer money between accounts it takes 4 days and the money is in neither account for two or three of them. There is no technological reason for this. Given the incredibly low interest rates, I really don't get the reason for it.
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I'm thinking the same. I'm just surprised the cost of setting it up that way didn't exceed the money they make back.
Less than 10 years after 'robo signing' scandal (Score:1)
In case you don't remember, the last time a brilliant silicon valley idea to speed up bank transactions was implemented on a massive scale, it directly led to massive mortgage fraud that was an important factor in destroying the economy in 2008 and leading to the Great Recession. I refer to the robo-signing scandal where some folks decided the old fashioned way of doing mortgages was too slow, so why not have bank employees just use a computer to rubber stamp mortgage paper work and overlook all those littl
INVESTMENT Banks (Score:3)
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Where's the harm in having too big to fail entities with little/no regulation keep track of all their information in a blockchain. It's not like there's a possibility of a disagreement about who owns that $1billion asset. Oh well, too big to fail, the taxpayers should just buy an additional copy of that asset so they each have one.
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I do believe the federal government has experience with huge quantities of data.
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The Feds are either capable of anything or total losers. It just changes based on what is convenient for the current story.
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Both can be true. I have no doubt that there are elite groups within the government who could track me with a satellite 24/7 or have me die of natural causes within hours of the order being given. I also have no doubt there are many people who are less competent. But then again, only 10% of any organization is competent, so...
shared database asking for corruption (Score:1, Troll)
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In a 'blockchain' scenario each entity keeps their own copy of the chain that is cryptographically put together.
If somehow one participant does manage to corrupt their copy of the chain it is instantly detected (bad cryptographic chain) they can resemble it from the other participants (once again, cryptographically so they don't actually need to trust that the other participants are giving them the right information).
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Yeah, it's a great time to break out new cryptographic technology to a giant slow-moving market. It's not like there's anything on the horizon [wikipedia.org] that could cause a problem [wikipedia.org].
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Quantum computing is indeed a challenge that needs to be met sooner or later, there are a lot of theories about how to protect cryptography but as your links point out quantum computing is still in its infancy and without working prototypes we are still not sure what we will and will not be able to do.
Worst case scenario (and quite likely) just about every form of cryptography we have today is in jeopardy and if we don't react quickly enough the entire internet let alone things like blockchains are going to
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I don't think any of the bulk encoders are susceptible. It's just sharing of keys and verification of identity that won't work. I do realize that these are not minor issues.
Blockchain != trustless p2p (Score:5, Insightful)
Bitcoin/litecoin/dogecoin/etc attempt to solve the trustless peer to peer model.
A multi-bank blockchain implementation would not use a trustless model, it would be a trusted model where the sender and receiver both sign the transaction, and it is then added to the blockchain for consumption by all participating banks.
It's a way to share an immutable (without retracting ALL transactions before the transaction to be deleted) ledger, in this case between trusted parties.
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The computation and storage burden for maintaining a block chain is not zero. In fact, it can even be more than it otherwise would be in a more conventional data store such as a relational database. Bitcoin, Litecoin and Dogecoin solve this problem by paying the maintainers in the form of newly created units of digital currency. Banks already have the government granted power to create currency by booking assets and lending against them, so there's nothing for them to gain there. Having a public ledger is a
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...'tis one of the many reasons the likes of the Bank of England have been developing their own 'e' currency. They'll run the show, so you won't get to do anything unusual, but you'll still get the benefit of 'e' money transfers/payments etc. It seems like an attempt to 'get with it', but really its a way to make you think you're getting something new and good, whilst still maintaining the status-quo.
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Importantly, Bitcoin is vulnerable to one party gaining control of over 50% of all hashing. With banks trusting each other, and nobody else allowed to produce hashes, this problem is essentially no longer there. I'd quietly commented to friends it was only a matter of time before banks start doing something like this.
Save on processes - pay on infrastructure (Score:1)
Every time I see blockchain proposed to replace existing processes I see few remarks on the investments required to set up a "shared, distributed database that spans multiple organizations".
I'm pretty sure the regulators will require these databases to have a high level of security (which is built in, blockchain adepts will say), a high level of resilience (per bank, not as a 'distributed' system). This will drive up cost.
On top of that, a distributed database of investment transactions must be able to hand
saving money (Score:4, Insightful)
Actually working in the banking business instead of gambling in the stock exchange casino would save banks hundreds of billions. No wait, scratch that, it would save taxpayers hundreds of billions.
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Is that US-only or is that the story they are telling?
I look at Spain and Italy and Greece and while they didn't have the best economy to start with, it was the bailouts that did them in.
I also wonder, where did these billions come from? The stock exchange is a zero-sum game. So who paid these billions to the taxpayer?
12 billion dollars is not worth it. (Score:2)
The motto, the dream, the hope, the aspiration of every bank is to become so big no one else can compete, and to divert