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Businesses The Almighty Buck Technology

Wall Street Finds Blockchain Hard To Tame After Early Euphoria (reuters.com) 51

Posted by msmash from the reality-check dept.
Two years ago Nasdaq and Citigroup announced a new blockchain system they said would make payments of private securities transactions more efficient. Nasdaq Chief Executive Adena Friedman called it "a milestone in the global financial sector." But the companies did not move forward with the project, Reuters reported Tuesday, because while it worked in testing, the cost to fully adopt it outweighed the benefits. From a report: Blockchain, the person added, "is a shiny mirage" and its wide-scale adoption may still "take a while." In a joint statement, the companies said the pilot was successful and they were "happy to partner" on other initiatives. Both companies are also working on other projects. Companies, including banks, large retailers and technology vendors, are investing billions of dollars to find uses for blockchain, a digital ledger used by cryptocurrencies like bitcoin. Just last month, Facebook revealed plans for a virtual currency and a blockchain-based payment system. But a review of 33 projects involving large companies announced over the past four years and interviews with more than a dozen executives involved with them show the technology has yet to deliver on its promise.
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Wall Street Finds Blockchain Hard To Tame After Early Euphoria More

Wall Street Finds Blockchain Hard To Tame After Early Euphoria

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  • Surely you're not saying it was all hype (Score:5, Insightful)

    by grasshoppa ( 657393 ) on Tuesday July 16, 2019 @04:30PM (#58936286) Homepage

    You can't be seriously suggesting that all the buzz around block chain was merely hype with no substance.

    I'm shocked, SHOCKED, I tell you.

    • Re: (Score:2)

      by ceoyoyo ( 59147 )

      Me too. I totally thought that a completely tamper proof digital ledger would usher in a new era of prosperity!

      I guess a forty year old data structure with fast consistency checking just doesn't do it.

  • Blockchain is a marketing gimmick (Score:3, Interesting)

    by argStyopa ( 232550 ) on Tuesday July 16, 2019 @04:41PM (#58936350) Journal

    As someone "asked" by management to review how blockchain could be used to improve our supply chain (it was a mercifully brief fad a year or two ago), I quickly came to the conclusion that blockchain is basically nothing more than an answer in search, desperately, of a problem it can solve (with the generous application of $300/ hour consultants, of course.

    • Re: (Score:2)

      by sjames ( 1099 )

      That's the real problem. It's a tool that might possibly be useful for some applications, but rather than looking for tools to solve existing problems, management everywhere is looking for problems for the new tool to solve.

      • And egged on by $300/hr consultants whose work focused on justifying the need of their $300/hr gig by identifying the “problems” managements never knew nor was bugged by it, and convincing the Management that solving these problems are “critical for their long term competitiveness”.

      • Re: (Score:1)

        by Anonymous Coward

        The really truly useful takeaway from it...is where it came from in the first place.

        Hashcash. Spam mitigation with proof-of-work.

        C'mon, please tell me the rest of y'all remember this; you make me feel old when I have to collect geek cards.

  • How is this possible? You mean, large companies don't want to run their affairs with a simple-minded serial-access database that requires them to make all their transactions public?

    • Re: (Score:2)

      by gweihir ( 88907 )

      Indeed. Unbelievable. Large corporations otherwise do everything stupid they can. Why are they avoiding this thing?

  • It's an ideology based on the premise that some ill-defined notion called "decentralization" is both inherently superior to "centralization", and more fantastically, can be made perpetually self-sustaining merely by applying layer upon layer of mechanical incentive judo. The technology itself is an implementation detail that attempts to reiffy this simplistic belief system, but never quite succeeds because the problem it attempts to solve (the tendency for the complex feedback loops that form value settlement systems to converge on centralized solutions over time) is not inherently a problem in and of itself, and is ultimately a phenomenon that emerges from instincts that are deeply rooted in human nature.

    Blockchainism amounts to a modern-day hermetic belief that competition can be transmuted into cooperation, and like the alchemists and epicyclists before them, the proponents mistakenly believe that success is only a matter of constructing the right apparatus to perform this magnum opus. And likewise again, failures are blamed on insufficiently refined formulas, rather than on insufficiently examined premises.

    • Re: (Score:1)

      by Anonymous Coward

      I'd like to subscribe to your newsletter.

    • You can build centralized solutions atop a decentralized system, but you cannot built a decentralized solution atop a centralized system.

      In a decentralized system, centralization is merely an efficiency; if that centralized solution goes bad (e.g., an organization becomes corrupt), then it's possible to fall back onto the raw decentralized system, and perhaps figure out how to build new, clean, pristine centralizations—corruption can be interpreted as damage to be routed around, and not only are you a

    • Blockchainism amounts to a modern-day hermetic belief that competition can be transmuted into cooperation, and like the alchemists and epicyclists before them, the proponents mistakenly believe that success is only a matter of constructing the right apparatus to perform this magnum opus.

      I'm not sure if you meant to describe the invisible hand of the free market or not.

  • Blockchain hyped, but also very successful (Score:1)

    by Anonymous Coward

    You would have to ignore the regular use of cryptocurrencies across the world to say that blockchain hasn't been hugely successful. It’s usage is small, but taken within contexts it’s a worldwide phenomenon that has seen adoption not unexpected for such a revolutionary technology. It’s been widely successful and seen adoption patterns not unlike credit cards early on. People’s expectation of tech today is unrealistic. They lump in tiny improvements (like a faster computer or differen

  • Did you think Wall Street was interested in the technology of blockchain?

    At Slashdot we tend to think of blockchain as a technology. And it is. And it is evolving. And there may be a version eventually that offers an ideal balance of privacy, security and convenience. It's kinda exciting to watch.

    But the banking cartel (and the governments that they control) sees things differently. Blockchain is disruptive; a threat. They aren't sure exactly why or how, but their massive profits are likely to be threatened

    • Re: (Score:2)

      by jythie ( 914043 )
      I am always surprised at the persecution complex and narcissistic sense of self importance the 'I want to avoid income tax!' crypto crowd has.
  • Wall Street banks trying to profit on buzzwords and vapor. Nothing to see here, folks. Move along. Another charlatan with a shiny doodad to distract all of you will be along shortly.

  • Love that they didn't mention a single actual blockchain technology name. Idiots.

  • But not as a method of generating digital currency.

    From a technical perspective, blockchain can be used to detect tampering in a chain of handling. This means we might see this in the future for handling evidence, proving ownership, or proving country of origin for consumer products. The last one is already in place...

    A former customer of mine, has just recently started a project to use blockchain technology on meat they export to China (https://www.food-supply.dk/article/view/669236/danish_crown_vil_kopisi

    • There is nothing in what Danish Crown is doing that requires nor is helped by a blockchain. This is just putting QR codes on meat packages that link to a signature on a document that is encrypted with the local sellers private key. Yes they have probably been scammed into implementing this as a blockchain but there is not a single advantage in doing so, the only advantage you get with a blockchain is when you have a distributed environment like you have with Bitcoin.

    • Re: (Score:2)

      by ceoyoyo ( 59147 )

      From a technical perspective, blockchain can be used to detect tampering in a chain of handling. This means we might see this in the future for handling evidence, proving ownership, or proving country of origin for consumer products. The last one is already in place...

      This is the premise that gets everyone into trouble. A hash tree (a block chain for the hipsters) doesn't magically make your data tamper proof. Digital signatures and publication do that. The data structure makes it quick to verify consiste

  • I've always said it (Score:3)

    by xenog ( 3653043 ) on Wednesday July 17, 2019 @02:31PM (#58941254)
    I implemented a Bitcoin client, and I have always told people when asked about block chains that they are very limited in practice, and are only adequate for cryptocurrency and time-stamping so far. It is fascinating how people would just reply with some variation of "but it can definitely be used for decentralisation of x, says MIT/The New York Times/NASDAQ". The skeptical position on blockchains was most definitely unorthodox. Many had (and still do) a quasi-religious belief that block chains could be decoupled from Bitcoin and used for some allegedly higher (left wing coloured) purpose or simply to get investor money for some amorphous vague not-quite "idea". The block chain industry cannot die soon enough.

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