I don't understand why banks and companies are hyping "blockchain"

[Searing]

Yeah, I can understand that. But many of these articles say that X bank wants to develop their own blockchain. That's what I don't get...how it would be secured. Plus, it's a central authority which defeats one of the primary purposes of Bitcoin. None of the articles has addressed that aspect either.

When banks develop their own chain, it is not necessary for the crypto currency. It is an internal ledger system. This will reduce their current cost.

they will not stop there imho ....they also will use what power they have to influence lawmaker at that point in time on the 'evils' of open source crypto and try to
get their own blockchain and eventual cryto instead imho....it is just too tempting to try otherwise with the power and influence they have not ..to watch this
all slip away..especially if bitcoin and open crypto continue to make massive gains in adoption/ venture capital $$$ etc..they just can't let it go that way from
their perspective imho

again this has not started 'yet' but will soon banks and gov't types are waking up to this threat of 'open source' crypto they can't control.....it may not work on their
part but no doubt in my mind they (banks etc) are gonna try like hell to make it so...god help us if an ISIS fighter is found with a USB drive and 1000 btc on it! he
could be found with 1 million in cash in a duffle ...but that usd drive would drive the bitcoin is evil FUD up the wall imho

[ObscureBean]

I don't think that banks are after crypto, so them joining the Bitcoin movement is unlikely to happen. It's the decentralized nature of the blockchain technology that interests them. The blockchain has the potential to be an extremely robust and versatile platform for various online systems.  

[Searing]

I don't think that banks are after crypto, so them joining the Bitcoin movement is unlikely to happen. It's the decentralized nature of the blockchain technology that interests them. The blockchain has the potential to be an extremely robust and versatile platform for various online systems.  

But that is just it..there was an open internet and AOL tried (and succeeded for a time) in telling folks it was 'too complicated' and pay AOL to use their service as a front end
on this pesky open internet..it did not work but still

I expect the same to be tried by banks and others with crypto.....once they get blockchain idea down (internally as you state) they will take the next step...likely as a POS coin
and such...if for no other reason then to at least get a piece of the crypto pie even if it does stay open source

example already is RIPPLE and some others ..just saying..this will happen ..perhaps only on a 'knee jerk' reaction to bitcoins surge of use..but it will happen

as a further example of such backlash starting the Australian govt is 'investigating' the shut down by a bunch of banks (conspired) on bitcoin transactions and locked them out of their services....I would expect more of this ..with the cavaent that the banks say you can use their blockchain/crypto because it is 'safe' vs evil open crypto like BTC

its coming i probably won't work (banks doing this) but there WILL BE such an attempted backlash...pretty soon imho as banks and other traditional finance services get scared

here is the Australian bank link story as one example...a backlash doomed to fail perhaps ..but this is gonna get common imho over the next year

http://cobit.co/an-investigation-in-banks-that-closing-btc-companies-accounts-in-australia/

But again imho the banks or conglomerations of such WILL make (or push like RIPPLE) an alternative (probably POS coin) imho ...along with the above..the more INNOVATIVE finance places say (like barkleys?) may not ..or even AMEX but there will be much screaming of unfairness etc for those banks and finance houses that drag their feet.

and they will do what all do under such circumstances of seeing their empire fall....strike back with FUD, campaign contributions to politicans, PR campaigns etc etc

we will see but my take on this ..on how BIG it may be this push back I've no idea...but I still kinda suspect it will be substantial in that the true scope of open crypto btc/ltc etc is starting to sink in with these folks (ie it starts with blockchain and ends with wtf the bitcoin backbone mining network is how huge? damn it)

hard to be a banker waking up to BTC as a threat 'for real' say in the next few months don't ya know

[NorrisK]

These bank coins would do everything that is being shunned upon by the altcoins community...

1. Premine for distribution
2. Create more coins to distribute to self
3. 100% pre-mined

Etc.

Although systems like this would probably make checking reserves much easier.

[Amph]

because they can always create their own controlled bitcoin, like their centralized blockchain, they are only prone to do it, because of proof of intengrity that the blockchain may offer over their cluster database

otherwise there is no real difference between the two, this was interesting http://bitcoin.stackexchange.com/questions/38711/is-a-private-blockchain-better-in-any-sense-than-a-database

[vm_mpn]

I don't think that banks are after crypto, so them joining the Bitcoin movement is unlikely to happen. It's the decentralized nature of the blockchain technology that interests them. The blockchain has the potential to be an extremely robust and versatile platform for various online systems.  

But that is just it..there was an open internet and AOL tried (and succeeded for a time) in telling folks it was 'too complicated' and pay AOL to use their service as a front end
on this pesky open internet..it did not work but still

I expect the same to be tried by banks and others with crypto.....once they get blockchain idea down (internally as you state) they will take the next step...likely as a POS coin
and such...if for no other reason then to at least get a piece of the crypto pie even if it does stay open source

example already is RIPPLE and some others ..just saying..this will happen ..perhaps only on a 'knee jerk' reaction to bitcoins surge of use..but it will happen

as a further example of such backlash starting the Australian govt is 'investigating' the shut down by a bunch of banks (conspired) on bitcoin transactions and locked them out of their services....I would expect more of this ..with the cavaent that the banks say you can use their blockchain/crypto because it is 'safe' vs evil open crypto like BTC

its coming i probably won't work (banks doing this) but there WILL BE such an attempted backlash...pretty soon imho as banks and other traditional finance services get scared

here is the Australian bank link story as one example...a backlash doomed to fail perhaps ..but this is gonna get common imho over the next year

http://cobit.co/an-investigation-in-banks-that-closing-btc-companies-accounts-in-australia/

But again imho the banks or conglomerations of such WILL make (or push like RIPPLE) an alternative (probably POS coin) imho ...along with the above..the more INNOVATIVE finance places say (like barkleys?) may not ..or even AMEX but there will be much screaming of unfairness etc for those banks and finance houses that drag their feet.

and they will do what all do under such circumstances of seeing their empire fall....strike back with FUD, campaign contributions to politicans, PR campaigns etc etc

we will see but my take on this ..on how BIG it may be this push back I've no idea...but I still kinda suspect it will be substantial in that the true scope of open crypto btc/ltc etc is starting to sink in with these folks (ie it starts with blockchain and ends with wtf the bitcoin backbone mining network is how huge? damn it)

hard to be a banker waking up to BTC as a threat 'for real' say in the next few months don't ya know

I suspect that even if big banks decide to push out their own coin/s (I doubt they will) just to get hacked a few month later this will only increase awareness and adoption of Bitcoin and other open cryptos at the end... Granted, as of now this is mostly internal technology optimization for interbank settlements and should have no effect on bitcoin.

 

[crazyivan]

I've read literally dozens of articles on Coindesk, Bitcoinmagazine, and other Bitcoin-related sites and they are inundated with articles about how X bank wants to start using blockchain technology.

But in all of those articles I couldn't find a decent explanation as to why a bank would want to use their own blockchain instead of using Bitcoin. For example, we know that a blockchain is made more secure if more independent nodes are in operation. So does the bank plan on setting up lots of their own nodes for their own blockchain, and/or making any person who wants to use their services do so through the person's own node? Neither of those sound like a good plan, but in all that I've read, nobody has explained why/how a bank would secure and use their own blockchain.

I'd appreciate anyone's answer, or a link to an article that explains this.

Cause Bitcoin in its nature eliminates the middleman, that is financial intermediary. BTC is, in fact, improved system of financing without intermediaries, especially when smart contracts kick in. If I have money to lend and I know there is a person there willing to loan funds and there is a smart contract and BTC between us to execute this transaction, why do I need banks for?

This is why they hype blockchain cause blockchain they can use and incorporate. BTC is their doom.

[n2004al]

I've read literally dozens of articles on Coindesk, Bitcoinmagazine, and other Bitcoin-related sites and they are inundated with articles about how X bank wants to start using blockchain technology.

But in all of those articles I couldn't find a decent explanation as to why a bank would want to use their own blockchain instead of using Bitcoin. For example, we know that a blockchain is made more secure if more independent nodes are in operation. So does the bank plan on setting up lots of their own nodes for their own blockchain, and/or making any person who wants to use their services do so through the person's own node? Neither of those sound like a good plan, but in all that I've read, nobody has explained why/how a bank would secure and use their own blockchain.

I'd appreciate anyone's answer, or a link to an article that explains this.

The reason is very easy to explain and to be understood. Blockchain is the materialization of the connection using the peer to peer technology. The peer to per technology make possible the connection between two computers without the need of servers. So normally every information with all the kind of actual technologies applied to the internet to arrive from an computer (which send it) to another (which must received it) must go first in a server and then at its destination.  With peer to peer go directly from the first one to the second one. Eliminating the server. And the costs needed to realize and paid such kind of service. This mean reduction of costs. To much reduction. This is the power of peer to peer and the blockchain (which is the materialization of peer to peer in the above case). And its application can be in several fields of work of one bank. Especially in the big ones.

[Denker]

According the Q3 Report of HSBC, they had spent 9 billion on operation cost. I guess that's why they are so excited about the cost-reduction technology that's called "blockchain".

Of course the amount of costs they will be able to safe for transaction and settlement clearing will be enormous. The blockchain will have huge advantages in these cases and will give banks the opoortunity to disintermediate clearing houses and settlement systems like DTCC for instance.

[Searing]

According the Q3 Report of HSBC, they had spent 9 billion on operation cost. I guess that's why they are so excited about the cost-reduction technology that's called "blockchain".

Of course the amount of costs they will be able to safe for transaction and settlement clearing will be enormous. The blockchain will have huge advantages in these cases and will give banks the opoortunity to disintermediate clearing houses and settlement systems like DTCC for instance.

With blockchain technology, they can save a lot of money.
But they won't reduce their service fee to their customers, so they earn more profit by using blockchain technology.

It would be better if they use blockchain technology, and reduce their services fees, so customers & banks will get benefit from blockchain technology, but they won't

to my point in above post(s) ..they will make a run at bitcoin with their own closed blockchain coin co-op of some kind imho...they just have too..they 'can't' allow something like bitcoin to really break loose...it probably won't work (like music industry killing napster..just postponed change) but they will try....and the more scared they are of open crypto ..the more they will use political influence, fear and FUD of the evil btc and open crypto movement with a 'trust us' campaign alternative of closed coin ...prob pos coins instead or whatever to stop this open crypto dangerous trend they see

the backlash is just starting in that they (the banks and powers that are entrenched in current finance) WILL now push back big time imho ...they have seen the danger and it is US (open crypto movement)

Again the only thing WRONG about btc/ltc and open crypto imho from the banks and entrenched financial status quo ..imho again is that bitcoin is just fine....but they did not discover it first nor patent it etc...so it must, must die (or at least muddy the waters till they can catch up with their own versions of blockchains/pow coins or whatever)

just saying..they really have no choice.....from their point of view to try and discredit the open source crypto movement....in the fact they are the main closed source 'we control the access to wealth and capital camp'

anyway preaching to the choir here..but again ..it is gonna start to get ugly ..with fake facts and mud slinging headed our way I think

[Q7]

I think their plan is based onto something like creating a public trustful open ledger system where everyone, or I mean banks or customers can see what is the transaction movements that are taking place. I'm not sure by doing that, is their intention really focused on creating a virtual currency and then paying miners with rewards to actually secure the network.

[Mickeyb]

There is no official explanation OP, but if you read between the lines, you can realize that banksters and government people don't want to give up on their control of money, which they would effectively do if they adopt Bitcoin, since Bitcoin is transparent.

So the easiest thing for them to do is to say that Bitcoin is bad since it's connected to the illegal activities anyways and that they have come out with a solution of the Blockchain that will work even better than Bitcoin is working.

In all honesty, these private blockchains will give its owners even more control over people's money!

[cellard]

It seems pretty obvious to me. It's all a big tactic to distract people away from Bitcoin. They are scared as hell that people start using Bitcoin and realize through Bitcoin you don't need a bank. As a result, since they can't ban it, they needed to think about something less threatening than Bitcoin itself but still "get some of the technology" in a way. Right now they are with the "blockchain tech" fad, once they realize this is fucking useless they'll have to embrace Bitcoin 100% or get deprecated by superior technology. Though luck for them.

[CoinNation]

There is no need to worry about the hyping of blockchain by banks and companies. They are not going to create a new common currency. If they want to use a currency, it is bitcoin.

[TheTribesman]

I think the banks WILL create a common currency between themselves. I think they'll use it for internal bank transfers and lending worldwide.

I also think there will be some form of currency transfer involved whereby the fees institutional customers pay are used to purchase this internal bank currency which will eventually grow in value to be worth billions (if not trillions). The banks might also use it to replace LIBOR which is worth around $800 trillion but prone to corruption and manipulation. An open blockchain ledger and an index based on this new blockchain ledger might be touted as a way to eradicate criminality. And make loads of new money doing it.

It may never become a public currency but don't be fooled. Bankers are all about money. The blockchain is a new way to manufacture money. Does anybody really believe that the bankers won't use it for that?