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Author Topic: What would happen if Bitcoin's Blockchain is used by big financial institutions?  (Read 1417 times)
honeysyd
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December 04, 2015, 07:20:43 PM
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I recently found an article that the VISA Europe is testing remittances on the Bitcoin's blockchain. The company probably does not want to use Bitcoin as a transaction medium, but seems to consider only using the Bitcoin's blockchain with own digital currency or something similar. (http://www.coindesk.com/visa-europe-remittances-bitcoin-blockchain/)

I am wondering whether it is possible to use the bitcoin's blockchain without using bitcoin. If so, what would happen to the price of bitcoin?

I am not an expert of this field, so bit confused.


Thanks in advance.
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December 05, 2015, 12:52:42 AM
Last edit: December 05, 2015, 03:54:02 AM by johnyj
 #2

I recently found an article that the VISA Europe is testing remittances on the Bitcoin's blockchain. The company probably does not want to use Bitcoin as a transaction medium, but seems to consider only using the Bitcoin's blockchain with own digital currency or something similar. (http://www.coindesk.com/visa-europe-remittances-bitcoin-blockchain/)

I am wondering whether it is possible to use the bitcoin's blockchain without using bitcoin. If so, what would happen to the price of bitcoin?

I am not an expert of this field, so bit confused.


Thanks in advance.

You can imagine that similar to bitcoin community, a group of banks could build their own community, start an altcoin and use that coin to send money between them, they could even decide collectively on a 1:1 peg to USD or Euro for that coin to remove the exchange hassle at both ends, so they now can send money to another bank fast through bank's blockchain

But they can already do it today without blockchain: All of them have some kind of currency exchange contract to clear the international settlement daily. So why go for another technology which they are not familiar with?

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December 05, 2015, 08:33:49 AM
 #3

it will not be so different than someone running a pos coin and distributing the coins to everyone in exchange of something(job) which is very similar to their current system

still centralized still a fail, they would save on some aspect like proof of integrity
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December 05, 2015, 08:42:01 AM
 #4

You cannot use Bitcoin's blockchain without using Bitcoin. They can create their own centralized blockchain and a token to use with or they have to use Bitcoin and our blockchain.

Of course, if they would use Bitcoin's blockchain, the price would skyrocket.

This remittances market is by the way one of the Bitcoin's strongest use case out there! Huge money to be made here, this is as well huge market which is today highly inefficient and expensive to use for the foreign workers.

This market would also suit Bitcoin as it is at the moment very well, since near instant confirmation times are not at all that important for remittances.
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December 05, 2015, 08:52:52 AM
Last edit: December 05, 2015, 09:07:56 AM by n2004al
 #5

I recently found an article that the VISA Europe is testing remittances on the Bitcoin's blockchain. The company probably does not want to use Bitcoin as a transaction medium, but seems to consider only using the Bitcoin's blockchain with own digital currency or something similar. (http://www.coindesk.com/visa-europe-remittances-bitcoin-blockchain/)

I am wondering whether it is possible to use the bitcoin's blockchain without using bitcoin. If so, what would happen to the price of bitcoin?

I am not an expert of this field, so bit confused.

Thanks in advance.

Blockchain is studied but much important entities than Visa. I am giving here only some of the most important between those. It is studied by Federal Reserve, by Bank of Russia, by about 22 from the most world important banks etc. They are studiyng blockchain not to use it but to understand how it works. In order to use their principles. See for more the links below:

https://www.cryptocoinsnews.com/ibm-federal-reserve-want-create-bitcoin-knock-off/

http://cointelegraph.com/news/115302/russia-to-create-bitruble-a-state-run-digital-currency-for-2016

http://uk.businessinsider.com/13-new-banks-join-r3-blockchain-coalition-2015-9

The reason of study is very easy to be understood if you will know the peer to peer technology which is the beginning of everything. In building blockchain (and bitcoin) is used this technology which, told in a very simple way connect directly two computer leaving out the third necessary part until before the application of peer to peer: the servers. Until today every kind of communication between two points on internet MUST pass absolutely through a server. If not, the communication cannot be made. Peer to peer eliminate this third important part. Make possible the connection between two points in internet communicating directly between those. As you can understand easily is a very big invention. Initially was fight by everyone but the followers of it were able to win. They made various applications tentatives and at the end the most successful was bitcoin and its way of work. The way in which bitcoin communicate is directly an exact application of peer to peer.

The advantages of the application of this technology are enormous. It will change all the world of technologies connected with it. First of all, internet. We will have in the future another internet, another structure for it. But the applications can be without end. For example I can tell you one which no one can imagine except their inventors.

Blockchain can be used as a notary office. A couple is married and has put in the Horizon blockchain the proof of their marriage. This blockchain will be for them their notary office which will certify their marriage. The proof is within the above blockchain (in the form of an transaction) and is unchangeable by no one in time. Can be found within seconds with the hash which identified that transaction in the above blockchain and prove that they are married. This is an invention of Horizon team. If you want to know more about Horizon project (which have even its crypto named horizon (hz)) go there:

https://bitcointalk.org/index.php?topic=823785.0

If you want to know more about the married couple read this Bloomberg article and see their video made live during moments of their marriage and the put of their proof of their marriage at the Horizon blockchain read ans see below:

http://www.bloombergview.com/articles/2015-12-01/i-attended-the-first-official-digital-wedding

https://www.youtube.com/watch?v=ZBRKHlTOPuw

In few words. The end of the applications regarding peer to peer can be only the imagination of everyone. So no one can know which will be ...
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December 05, 2015, 02:47:09 PM
 #6

Banks love blockchain techonology for a while already. They just hate bitcoin and make everyone hate it so they will have someone uses their digital currency developed by them Grin
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December 05, 2015, 03:07:23 PM
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If so, banks will clone blockchain and clone bitcoin and use that coin for transactions. They wont ever use bitcoin.
Banks hate bitcoin.
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December 05, 2015, 07:55:42 PM
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except that they will be prone to 51% attacks due to low network strength..
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December 05, 2015, 08:11:43 PM
 #9

I think in most minds here the question they're more interested in is what effect it would have on the price. Plenty will be using coloured coins which will involve nominal amounts. There are projects waiting for bigger blocks so I think we've only just begun to see what the effects might be.

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December 05, 2015, 08:27:51 PM
 #10

it will not be so different than someone running a pos coin and distributing the coins to everyone in exchange of something(job) which is very similar to their current system

still centralized still a fail, they would save on some aspect like proof of integrity

I really think that this is the key about it, maybe banks and/or governments could made his own cryptocurrency and try to force people to use it, but they will never have success, just because there is something better that already exist, the bitcoin, so will be a question of matter that people realize that and stop using the banks/governments currency.

IMHO #1 of suspects, Hal Finney is/was Satoshi Nakamoto
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December 05, 2015, 11:55:56 PM
 #11

I recently found an article that the VISA Europe is testing remittances on the Bitcoin's blockchain. The company probably does not want to use Bitcoin as a transaction medium, but seems to consider only using the Bitcoin's blockchain with own digital currency or something similar. (http://www.coindesk.com/visa-europe-remittances-bitcoin-blockchain/)

I am wondering whether it is possible to use the bitcoin's blockchain without using bitcoin. If so, what would happen to the price of bitcoin?

I am not an expert of this field, so bit confused.

Thanks in advance.

Bitcoin, or rather Satoshi, is fundamentally part of the bitcoin blockchain.
You can think of the bitcoin blockchain as a large file archive.
Take a look at this file (raw data of blockchain block): https://blockchain.info/rawtx/b6f6991d03df0e2e04dafffcd6bc418aac66049e2cd74b80f14ac86db1e3f0da
On the 10th line you can read:
Code:
"addr":"1FwYmGEjXhMtxpWDpUXwLx7ndLNfFQncKq",
"value":100000000,
"n":2,
where value is the amount of satoshi. In this case, 100000000 satoshi is 1 BTC.  Thus bitcoin (Satoshis) will always be a part of the blockchain. The blockchain is universally agreed upon by its members.

You can use the technology behind blockchain, to create a chain that does not contain bitcoins. That would not be the bitcoin blockchain but an altchain (altcoin).


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honeysyd
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December 06, 2015, 08:40:43 AM
 #12

I am not an expert of economics or computer programming. From my readings of several books about economics and Bitcoin, so far my conclusion about Bitcoins' future is as below. Please note that they perhaps have many flaws, as based on strong knowledge.

(1) Replacing sovereign fiat with Bitcoin does not seem to be possible at least in the near future. It is because no countries with strong economy and large population uses two currencies simultaneously (e.g., I cannot imaging a situation where a can of coke is labelled with two currencies). Even if merchants accepts Bitcoins, they must spend Bitcoins for paying wages or buying stocks, to meet one of the essential conditions of money, i.e., circulation. However, the collapse of local currency in countries like China, US and Europe does not seem to be imminent. Even though it happens, we cannot guarantee whether Bitcoin is adopted as local currency. So, the chance is low.

(2) Bitcoin may be a good replacement of gold. So, I am currently investing in Bitcoins because of its potential as the storage of value, but not as currency.

(2) However, Bitcoin blockchain appears to have a huge potential. I have no doubt that the blockchain technology will play a major role in future finance. Considering that the Bitcoin Blockchain is the most largest and reliable network so far, some companies perhaps find ways of using Bitcoin Blockchain. So, I am wondering what would happen to the price of Bitcoin,  when big financial institutions use the Bitcoin Blockchain.

(3) Ethereum appears to lead the future of blockchain technology. When the Ethereum network becomes as large and realible as those of the Bitcoin Blockchain, then many companies perhaps prefer to develop applications on the Ethereum network owing to its expansibility. Then Bitcoin Blockchain will become less attractive.

More comments are welcome. Smiley
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December 06, 2015, 08:44:01 AM
 #13

Still quite impressed Visa are able to pull off what they've done right on the Bitcoin blockchain.. more to follow hopefully.

 

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December 07, 2015, 04:22:34 PM
 #14

It is the Bitcoin future, in any case banks will start to use BTC as payment  Wink Banks love to implement something like this  Wink
AtheistAKASaneBrain
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December 07, 2015, 05:07:25 PM
 #15

You cannot use Bitcoin's blockchain without using Bitcoin. They can create their own centralized blockchain and a token to use with or they have to use Bitcoin and our blockchain.

Of course, if they would use Bitcoin's blockchain, the price would skyrocket.

This remittances market is by the way one of the Bitcoin's strongest use case out there! Huge money to be made here, this is as well huge market which is today highly inefficient and expensive to use for the foreign workers.

This market would also suit Bitcoin as it is at the moment very well, since near instant confirmation times are not at all that important for remittances.

Well they could create a sidechain, and issue their own "VISA token", by doing this you still benefit from the Bitcoin blockchain's superior security while not having to use the actual Bitcoin token. Bitcoin benefits from this since at teh end of the day is all thanks to Bitcoin's blockchain, so it's a good thing.
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December 07, 2015, 05:54:28 PM
 #16

It is the Bitcoin future, in any case banks will start to use BTC as payment  Wink Banks love to implement something like this  Wink

Well, to be honest. I don't think that banks like Bitcoin. Bitcoin is what they fear the most as it can potentially ruin their way of generating profits from fees and such. They do like the blockchain as technology, though.
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December 07, 2015, 06:17:22 PM
 #17

It is the Bitcoin future, in any case banks will start to use BTC as payment  Wink Banks love to implement something like this  Wink

Well, to be honest. I don't think that banks like Bitcoin. Bitcoin is what they fear the most as it can potentially ruin their way of generating profits from fees and such. They do like the blockchain as technology, though.

Banks in general do not like bitcoin. Just look at what banks pay the mass media to say:
- Will Bitcoin ever rebound?
- Bitcon fallacy led to Silk Road..
- Bitcoin price plunge..

Not all banks are criticial about it. I heard small banks see bitcoin as an opportunity to get bigger.

...loteo...
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richardsNY
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December 08, 2015, 02:06:12 AM
 #18

It is the Bitcoin future, in any case banks will start to use BTC as payment  Wink Banks love to implement something like this  Wink

Well, to be honest. I don't think that banks like Bitcoin. Bitcoin is what they fear the most as it can potentially ruin their way of generating profits from fees and such. They do like the blockchain as technology, though.

Banks in general do not like bitcoin. Just look at what banks pay the mass media to say:
- Will Bitcoin ever rebound?
- Bitcon fallacy led to Silk Road..
- Bitcoin price plunge..

Not all banks are criticial about it. I heard small banks see bitcoin as an opportunity to get bigger.

The smaller banks seem to be more customer oriented and more open towards new technologies that can help them move forward. Large banks fear Bitcoin because they know the Bitcoin system is much better, but will lead them to much lower profits if will adopt it.
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December 08, 2015, 03:15:10 AM
 #19

It is the Bitcoin future, in any case banks will start to use BTC as payment  Wink Banks love to implement something like this  Wink

Well, to be honest. I don't think that banks like Bitcoin. Bitcoin is what they fear the most as it can potentially ruin their way of generating profits from fees and such. They do like the blockchain as technology, though.

Banks in general do not like bitcoin. Just look at what banks pay the mass media to say:
- Will Bitcoin ever rebound?
- Bitcon fallacy led to Silk Road..
- Bitcoin price plunge..

Not all banks are criticial about it. I heard small banks see bitcoin as an opportunity to get bigger.

The smaller banks seem to be more customer oriented and more open towards new technologies that can help them move forward. Large banks fear Bitcoin because they know the Bitcoin system is much better, but will lead them to much lower profits if will adopt it.

I don't think the bitcoin system is 'better' than the systems in place at large banks.

Bitcoin can, and has failed, the impact of which was negligible in the wider economy only because not many people use bitcoin.

However, if you think about what the banks are sustaining on a global scale, and the number of people using them.. Well, their system is pretty good i'd say.

 

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honeysyd
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December 08, 2015, 05:47:16 AM
 #20

You cannot use Bitcoin's blockchain without using Bitcoin. They can create their own centralized blockchain and a token to use with or they have to use Bitcoin and our blockchain.

Of course, if they would use Bitcoin's blockchain, the price would skyrocket.

This remittances market is by the way one of the Bitcoin's strongest use case out there! Huge money to be made here, this is as well huge market which is today highly inefficient and expensive to use for the foreign workers.

This market would also suit Bitcoin as it is at the moment very well, since near instant confirmation times are not at all that important for remittances.

Well they could create a sidechain, and issue their own "VISA token", by doing this you still benefit from the Bitcoin blockchain's superior security while not having to use the actual Bitcoin token. Bitcoin benefits from this since at teh end of the day is all thanks to Bitcoin's blockchain, so it's a good thing.

If VISA or other financial institutions use their own token (like VISA token in your example) on the Bitcoin blockchain, then what would happen to the price of Bitcoin? As long as I understand, although own tokens are used, the transactions on the Bitcoin blockchian must be done with Bitcoin.
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