Bitcoin Forum

Blockchains don't really offer anything a bank would need.   

They have perfectly good ways of storing and processing transactions already.  With Btc addresses and transactions are publicly visible.  I don't want my bank account and details visible to the world.  Unless you had unique, one shot payment addresses, it would be simple to create a wiki mapping addresses onto organisations and eventually people.  Then there is processing.  Btc only works as it pays miners to verify transactions.  There is no way a bank would give over its processing to a third party that wasn't 100% legit.  Would it run all its miners/verification in house?  How do you explain the 51% threat to a bank?

The openness of block chains isn't really relevant to huge organisations. 

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I have to disagree. Banks are interested because of the openness of blockchains. Instead of having complex and long-winded digital records, they can have all this information easily accessible. I think it also greatly reduces the problems resulting from money transfers between different banks.

who said anything about bitcoin, anything about being public, or showing the source code?

this is my speculation based on what i have read:
it is the technology they are going to use. which means a blockchain that they will use "internally" hidden from eyes of anyone outside. they will have their own internal miners and everything will be centralized and closed source. so there is no blockchain for you and me to see, there is no miner that we can attack 51% :)
by doing this they can have super fast, and extremely secure way of transactions with zero possibility of any kind of attack in the middle.

and also there are anonymous transactions that can be used even if the blockchain is public. so it can solve the problem of privacy.

Would they even have miners if all transactions come from inside the bank?  Maybe one to keep an eye on things.  No miners means the block chain is just a data structure.  Then it all boils down to how efficient is it at storing data compared to their current db? 

The banks will use "Private" Blockchains that would only be accessible to them. Bitcoin is PUBLIC. One of the main reasons banks would be

interested in "Private" Blockchains, would be for security. A decentralized network, cannot easily be taken down, like a centralized ledger. They can

also bypass services like SWIFT, if they want to transfer money between different banks.  ??? {Making it cheaper, and more profit for them}  >:(

A private blockchain is like a local area network, the access is controlled locally. It is not open like Bitcoin.

There would be no 51% threat to the chain and the network could be maintained using minimal CPU power.

Why do banks use blockchains? Because most people don't understand what it means, and it's great PR to show they are moving with the times. It also gives them a chance to dump the toxic debt that is associated with the current virtual fiat currencies.

Like all the banks would use the same sort of compatible blockchain.  ;)  I'm sure they already have their data replicated around the world for security reasons, but you could have a node in each country. 

sometime soon they will have a standard blockchain for every bank. then they can all work together.

Don't forget as well that the blockchain technology also offers potential use cases for insurers that include innovating insurance products and services

Bitcoin's best feature is the database. A banks business is mainly a huge database that keeps track of customer records. The ach/eft system is an enormous database that keeps records of customer transfers between banks and businesses. As banks continue to accumulate massive amounts of data, with no end in sight, the industry must find new ways to store it.

The key requirements of big data storage are that it can handle very large amounts of data and keep scaling to keep up with growth, and that it can provide the IOPS necessary to deliver data to analytics tools. The analytics tools lookup account records, determine balances, screen for fraud, track deposits/withdrawals/automatic payments, rout direct deposits and a multitude of other functions. Bitcoin is sorely insufficient for the needs of a major bank with a constantly accessed major data set. It's too slow and too clumsy to be useful. However, banks have one other database that Bitcoin might be useful for and that's data warehousing.

A data warehouse is housed typically on an enterprise mainframe server or in the cloud. Data from various online transaction processing applications and other sources is selectively and only periodically, extracted for use by analytical applications and user queries (like asking your bank for a copy of last years transactions for an IRS audit). These warehouses have no need to be super fast or stored locally. Something as clumsy and slow as Bitcoin would be well suited to data warehousing. The problem is the volume of data that only one bank stores makes the Bitcoin full node blockchain look like a Nikon camera SD card. Banks would only be interested in using the blockchain streamlining and data redundancy features to link all of their warehouse mainframes worldwide.

This use is meaningless to Bitcoin or it's adoption rate.

How you are saying that banks are not in need of the benefits of using blockchain.

Banks need to maintain huge volume of data whereas blackchain efficiently manages huge volume of data in distributed mode. One simple advantage of this would be reversing or faking will be prohibited with the case of using blockchain technology, for example.

In my understanding banks need blockchain in technology to ease their current operations but definitely do not need any private altcoins.

They are not going to use bitcoin blockchain, they are interested in creating their own private blockchain that will not be accessible to the general public.

Reversing or faking is prevented in bitcoin through the use of mining which is how one can maintain a current "truth" in the blockchain in a trustless system. Blockchain technology by banks have no need for working with a trustless system with their own data in house. Blockchain provides a way to have a current state across many nodes, but for in house data there is no need for such protection against reversing or faking, and there is no mechanism to do so either.

Quite true, but it should be a single interbank blockchains, not every bank's own. For customers it is good that the cancellation fee amount will be much lower than it is now.

This may not be what you are looking for, as it is not purely from a monetary/transaction standpoint. Banks could use the blockchain to securely and proofably hold data. The company Tierion does this with health and other business data. https://tierion.com/

To expand on this. Do transactions off-chain and simply store the hashed data containing the transactions on chain.

I think that's what they're trying to sell. It's cute that they show 2,700 records stored. According to ach/eft, the average consumer storage is roughly 63,000 individual records per year. That's all deposit, withdraw, pos terminal, check, auto pay, lookup, direct deposit, credit inquiry, consumer unknown credit pull and more. For a single country that's about 18,900,000,000,000 records per year. I think Tierion may be a little overwhelmed. LOL

Banks would probably not adopt a technology that considerably limits the control they have. It is possible that someday some banks will adopt Blockchain Technologies for real-world applications, but certainly the first thing they will try is to use some kind of centralized blockchain.

It is entirely different from what you think it is,blockchain and virtual currencies are entirely different and banks are not using blockchain to build a currency of their own ,instead they will be having their transaction records in the blockchain and it will be a closed one without any doubt.

Why would you need a block chain in a closed system?  What advantage does it give you over your current system?  The fact it is de-centralised means nothing if you are using it in-house. 

Banks simply don't understand blockchain technology.  Bitcoin really matters not blockchain  :)

Blockchain technology ease the way of getting interlinked to each and every users around the world. Also it reduces the risk of errors or mistakes occurring within transactions. Because in the open source if errors were found the confirmations won't take place.

As far as I know, bitcoin transactions and record keeping use an integrated form of cryptographic check summing which could be more difficult to hack than the system banks use.

Blockchain technology is also less expensive, more robust and reliable than the ACH system used by banks.

The systems bitcoin and banks use are difficult to compare.

Banks use firewalls and security features to keep transactions private.

Bitcoin transactions are public and don't need firewalls and other security apparatus which represents a completely different model.

Remember that banks will use blockchain technology and not bitcoin. If they will use bitcoin then transactions will be possibly open and can be viewed to the public. But its blockchain technology and not bitcoin that they are after and it means simply that they will use private transactions rather than public ledgers. The launching of banks using blockchain technology is a threat to bitcoin but we hope it will have no big and lasting effect to bitcoin and other altcoins.

banks might be will not interested for cryptocurrency but i heard that they currently more interested how works blockchain technology system because they says if blockchain technology applied for banks system then the transactions will be more faster than now and Bank of Canada has trying these technology

It's because it's more transparent and i suggest you to research first before asking silly question like what is bitcointalk? IT'S JUST A FORUM USING SMF FORUM
Hope this helps

The open blockchain give access to everyone excluding the right of centralization by a government influenced economic system (bank). The bank can't control such a database which is regularly growing with miners efforts.

I learn that the bank canada will adopt it. This certainly is good news. see how blockhain, I really appreciate that blockhain indeed a very nice system. blockchain have good security so they can make the level of confidence in the bank to be increased.

Banks should use the Blockchain technology to ensure that there is no corruption and to avoid money from being taken  with no way of tracking it. It should be mandatory for Banks to use the Blockchain technology to keep track of their records and to make that information available publicly.

Funny you ask. There are major benefits.

http://www.coindesk.com/accenture-blockchain-save-investment-banks-12-billion-year/

Well this innovation would really come up into banks in near future and im sure that they are already thinking now about this blockchain technology i could say there is really an advantage on using it and just like you said this would really help out to increase the security regarding on bank operations.

I don't know how much I trust the word of the greedy Accenture Corp.

http://www.coindesk.com/accenture-uk-government-should-regulate-bitcoin-wallets/

https://news.bitcoin.com/accenture-discredits-immutability/

https://www.linkedin.com/pulse/accenture-hackable-blockchain-charles-moore

http://fortune.com/2016/09/20/accenture-blockchain/

http://fsblog.accenture.com/banking/where-are-bitcoin-transaction-volumes-heading/

https://bitcoinmagazine.com/articles/accenture-executives-propose-replacing-bitcoin-closed-blockchain-1438379312/

https://bitcoinmagazine.com/articles/researchers-propose-rscoin-a-permissioned-blockchain-currency-controlled-by-central-banks-1457982849/

http://www.newsbtc.com/2015/07/28/accenture-advocates-separating-blockchain-from-bitcoin-mechanism/

All banks should be transparent database. Due to protect their users, will also quickly process if a system error or fraud in disguise. For that all required details should be complete. incomplete data will also be contrary to rules of banking in the country.

To track the flow of funds, bank also has its own system. And this is not inferior to blockchain. I just imagine if bank uses blockchain system, there will be plenty of termination of employees (such as tellers, etc), because all of online system has been modified and understood by public.

They know there are cost savings there: http://fortune.com/2016/09/28/blockchain-banks-2017/ of course they will.

I give a +1 for the perfect response. Blockchain technology is much more innovative than any other Technology being adopted by banks currently. If Banks makes that switch to Blockchain and learn to utilize it properly, That's a right step in a good direction.

They want a "blockchain" but they don't want bitcoin. That want all the security the bitcoin protocol provides (via mining, proof-of-work etc) but they want it in their walled garden.
Ask anybody what a blockchain and they will answer that is the "technology behind bitcoin"!
FALSE!
The Blockchain is the chain of blocks in which all the transactions are stored. full stop. Then they build a huge castle on top of this.
And, of course, the blockchain "does" and solves every problem.

Go buy a blockchain

They wouldn't use Bitcoin and blockchain technology as this wouldn't give them money, making biggest profit only for miners that earn with the transactions. Banks want profit and big profit for them without share with others.
As they have their own method to make transactions and to earn money, they won't use another's technology, they are fine with how the things work now.

the blockchain is not just a technology its a revolution because it will change the financial sector in recent years as many country including china and Indi ae researching on this technology and alrady china had started to develop something lke bitcoin useing technology like blockchain . so banks and other sectors would definotely adoptp such technology.

I think if the banks will be allowed by the governments then they will be allowed to use blochchain and then they will start to create their wallets and will accept bitcoin for their use etc. If they will collect enough data for themselves and will be satisfied with it then I do not think that they will need to show their transactions or the transactions of their clients to other people so they may tr to hide or if everything was the same as now then they will not be able to hide bitcoin transactions with them of their clients.

There's no point for the banks to create a wallet and to start accepting bitcoin. Banks have their own group of curencies they accept, they keep the accounts in those currencies. They don't need a new currency at all.
What would be the blockchain technology good for them? If you want to send a transaction intrabank, it's usually done in a second, and it's usually free with the banks' current systems. If you want to send a transaction in the same country but using different banks in the same currency, nowdays it's just max. an hour to complete. If you want to send a transaction in different currency, that needs time (2-3 days) to arrive to the different country, to a totally different bank.
Banks need to speed up this kind of process. But, they don't need a new currency (bitcoin) for it, they just need a quicker system handling the transactions between banks. If banks could change SWIFT system to a new one, based on a closed blockchain, they would have the new and really quick, but still reliable system. The problem is solved, without bitcoin, but with blockchain technology.
Another typical solution would be the share market on exchanges. Nowdays if you want to buy shares, it clears in 2-3 days time (e.g. if you want to bus shares from overseas). If you could use a blockchain based technology for it, buying-selling shares and registering the ownership would take half an hour. It could speed up the current system. These are just a few possibilities, but there are a plenty of them.

I think there is a point for the bank to accept bitcoin, that is to ride the wave.  Banks is always updated with  what is trending in a finance industry.  They know what is profitable and which one is best to invest to.  Probably, in my opinion, some banks had already invested in Bitcoin.  They are just hiding it.

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Blockchain is like a ledger so definitely bank will  use it since it will be their advantage if they do.

I share same point of view, blockchain is a revolution and bitcoin can make changes in current financial system. But not everything that is better and more useful is adopted, you always have people who will fight against evolution.
Blockchain is for everyone, by that its for banks as well. Problem with banks is that they work just for profit, and if they think they can earn from that they will adopt it for sure.

Blockchain is not about bitcoin, you can see the hyper ledger project. The blokchain is about the automation of the financial system. The problem is blockchain can be a threat for the bitcoin itself. i just take an example such as the hyper ledger project. Does it makes sense to be a threat for bitcoin in the future.

Why do everyone incorporate blockchain and profit in the same sentence .I am sure everyone is wrong in understanding the concept.Banks use blockchain because it is easy to maintain and the logs cannot be manipulated if they start using a block chain and it wont necessarily be an open block chain,they can have an internal structure.

Block chain can be termed as a permanent database storage system and why wouldn't a bank use the latest concept and use it .You do not need a huge infrastructure to start that and the transactions will be transparent and government or any investigating team can follow things up pretty fast with the help of an open ledger .These are some of the things that comes to my mind and the advantages of block chain are limitless .

People use banks not to reveal their financial situation (account balance, transactions history etc.). If you use an open ledger, the information is not private anymore. Banks can use a closed ledger to maintain all the neccessary transactions, and it won't be a problem for the governments (and for the tax authorities) because they will have access to the closed ledger of course.

I do not know much about it, but closed blockchain is able to access by particular people, and open blockchain is what bitcoin uses.

so it will make banks easier to record the data because sometimes the employer makes mistake in counting the money.

I agree that blockchain and profit are two different things.  Blockchain is like a ledger and more likely bank will have a private ledger (blockchain) if they are to use it.  Though I can say blockchain can be possibly manipulated if it is private and no one can verify it and all nodes connected to it approved the manipulation.

I just think if the blockchain can remove a lot of the middleman, blockchain have various advantages.
You mean about public and private blockchain. Fully automation in the future.
https://blog.ethereum.org/2015/08/07/on-public-and-private-blockchains/

Blokchain is a threat to the banks.
Banks act as a third party to regulate the trade between 2 people
 and charge their commission.
Where as in block chain the  people who have to do the transaction only are present and no third party.
This is a threat to the banks.
If bitcoins in the coming years progresses in the same way than banks may start closing.
And at a time there may be no banks.
But banks can use blokchain to purchase bitcoins form the money they have and sell it at a higher price later and earn.
Banks might secretly also may set up mining computers in  their offices and earn then.
Thus   there are very few things a bank can do with blockchain

Why do the banks wanted to upgrade their system? The answer is not just about accuracy but the answer will lead to profit. Why are there banks, the banks are existing because of profit. Banks always mean business and business means profit. And so you cannot separate their integration of blockchain technology to profit since they are alive and operating because they are gaining profit.

The only answer is profit. Everything that banks do is only because they see the opportunity to earn money and make profit. They see in blockchain new technology they could easily use in they business, lower the costs and run profitable business. Simple as that. But the fact that banks will implement blockchain technology will not influence Bitcoin in negative way.

They have no choice to jump in the train if they won't to follow the trend. better for them to use instead to be obselete in some years from now. It can aslo i guess reduce their costs. (operations, maintenance, ect)

May be you have miss something or you are a bit confused about bitcoin and blockchain. Blockchain is a blessing that is, a gift and not a threat even for the banks too. Blockchain  (https://www.weusecoins.com/blockchain-uses/)can operate not only with bitcoin but for many other usages like as smart contracts, digital assets, records etc. Banks are welcome to buy bitcoins like as any other organization and individuals too. So they can sell their bitcoin stash anytime they want like the rest investors. There is no reason banks secretly to mine bitcoins and is completely mindless running mining software from their offices. The mining software is free for everyone even he wants to use the GPU of his laptop to mine what? bitcoins only in 2009. If banks want they can invest money to create mining pools like as any entrepreneur. On the other side they really want blockchain because as an idea is revolutionary, innovative and cost effective as some forum members already have posted.

i think currently the banks do not feel the need to use it but as time pass we can see that the modern countries are adopting the technology and that is why we can say that after some time all the countries the modern or the backward will start start using bitcoin. because it is the need of the time.

I can imagine that the usage of a blockchain brings a big plus of security to banks.
Bitcoin which is based on blockchain technology is very difficult to hack.
Banks could adapt this system to their own necessaritys and make the digital flow of money even more safe from attacks.

I have thought a bit about that question. At a first glance, it makes no sense for a bank to use neither a centralized blockchain - because it would offer no advantage to traditional database accounting systems - nor an open blockchain with PoW or other consensus mechanism - because they would give up control about the transactions and expose them to certain risks.

An interesting post has been written in the Ethereum blog (https://blog.ethereum.org/2015/08/07/on-public-and-private-blockchains/). There are two main categories where "restricted" blockchains could make sense.

First as an "inter-banking" transfer mechanism ("consortium blockchain") where the trust between institutions can be lowered a little bit (blocks must be signed by the majority of connected institutions, but not by all, and one malbehaviouring node - e.g. after a hack - would not be able to bring down the system).

And then as a private "in-bank" blockchain - but such private blockchains would not be actually very different from the traditional databases, only that they would add a kind of "cryptographic proof" for the state of the system. It would be a kind of additional security layer. The author of the blog post, however, thinks that with less complex measures like libsnark (https://github.com/scipr-lab/libsnark) that could also be achieved.

What would have to be analyzed if these two ways really represent a more efficient approach to security than already known traditional security mechanisms. I think the real benefit of the blockchain is that it enables decentralized systems to work - so "bank applications" would only be a side-effect and not be at all important for Bitcoin.

I've read the linked ethereum post and found it pretty interesting, thanks.
In connection with the above mentioned in-bank blockchain, I don't think that a kind of solution like that will be implemented at all. My opinion is that banks don't need a blockchain like solution just for intenal purposes. They already have their own system that's accurate, fast and has security functions implemented. In-bank transfers usually complete in a second, or even less, it's just modifying 2 values in a database.
Making the system redundant (2 server farms in the country) can provide enough security for disaster recovery purposes with a proper backup procedure implemented and used. If they create a new blockchain solution to eliminate the 2 server farms and they provide dedicated computers in each branch to keep the database always up-to-date and updated, they can save the price of the server farms but current blockchain solutions will lead to slower service, which is unacceptable now.
Blockchain solution is needed in case of inter-bank transfers because the current system is relatively slow. In my country, transfers (same currency, same country) completes in an hour usually, but in peak time it's a bit more. This could be done faster using a restricted blockchain, used by the banks in the same country. Blockchain for international transfers can be a real challenge.

Blockchain guarantees that transactions won't be fake and etc, all transactions will be publicly available but that's what banks don't want. Not only banks but even countries have to use blockchain, if you searched, you may know that georgia is first country which turned into blockchain system.
Also it will be a great step against money laundering.

Don't misunderstanding between bitcoin and blockchain. Maybe bank refuse bitcoin, but they can use blockchain as their infrastructure

Yup.  Customers want to use blockchain assets like bitcoin and so financial services providers (aka banks) will need to use a blockchain to enable these services. 

Banks would use blockchain because it is more affordable and also it can expand the number of its users because those people who are using blockchain will try banks that use blockchain too. Blockchain is much cheaper than the traditional system and it also offers fast transaction, So i think banks should use blockchain as soon as possible.

It's not so easy. There are two different things:
- Banks would use blockchain, because it will be faster and cheaper: Yes, it's blockchain, not Bitcoin
- People are using blockchain: Yes, because people use Bitcoin which is blockchain too
- People will search for banks who have implemented the blockchain technology: No, because people won't mind what's behind the scenes in banks' system, is it a blockchain or not, they only want cheap and quick service, and they don't care about how banks solves this inside their systems. If banks can solve it with blockchain or without blockchain, people usually don't care
- Banks should use blockchain as soon as possible: Yes, because they can cut their costs on international transfers  (with blockchain and not with bitcoin). National transfers and intra-bank transfers are quick and cheap without blockchain, so banks won't develop this. International transfers are mainly used by companies (most of the people start international transfers really rarely, few times a year). People won't choose a bank depending on the usage of the blockchain for international transfers, because this is not their main interest. It's only companies (export-import companies) who can benefit from switching to blockchain, but really big companies has discounted fees at banks, so it's only the time that can be the real benefit for them (nowdays international transfer takes 2-3 days, with blockchain, it could be some hours, but in this case all the banks should use the same blockchain system)

There's an article about this in the Financial Times called, "Big banks plan to coin new digital currency". I had written about this in another post. Currently, four large banks are working on building their own digital currency, and the technology they're planning to use is built on Bitcoin. Here's a link to the article: https://www.ft.com/content/1a962c16-6952-11e6-ae5b-a7cc5dd5a28c

Sometimes a subscription page is shown when you click on the link, You can find the article by doing a Google search for it.

Ask rather, "Why would banks use accounting."

The way I describe to non-technical people is, "It's accounting 2.0."

Traditional two-entry accounting can span thousands of ledgers for sufficiently large corporations. A blockchain is a single, distributed ledger, an immutable record, fully auditable, and best of all, math!

This is the best answer, the blockchain can make the companies run in automation on his beneficial structure.
With accounting 2.0 with fully automation and they can save a lot of bucks.
That's why the entethalliance has made.