[2016-08-15] Banking consortium claims success in using distributed ledger tech

[sirohige]

The Bank of America Merrill Lynch, HSBC and the Infocomm Development Authority of Singapore (IDA) used open source Hyperledger software to create an app that replaces the paper-based transaction, they said in an emailed statement.

Information is shared between exporters, importers and their respective banks on a private distributed ledger, and a trade deal is executed automatically through a series of digital contracts, the statement said.

Each of the parties involved - the exporter, importer and both of their banks - can visualise data in real time on a tablet and see the next actions to be performed. Each action in the workflow is captured, giving transparency to authorised participants whilst encrypting confidential data, the consortium said.

Blockchain distributed ledger technology is best known for underpinning trading involving the digital currency bitcoin, but it has many other potential uses. Broadly it can be likened to a type of database that, using cryptography, can be operated as a digital public ledger for recording information, such as the transfer of assets between two or more parties.

http://www.out-law.com/en/articles/2016/august/banking-consortium-claims-success-in-using-distributed-ledger-technology-/

[Kaneki]

Blockchain has reshaped our thinking on how to make transaction processes more efficient and transparent for all parties. The success of this proof of concept is a significant development towards digitising trade transactions, potentially resulting in considerable benefits to the supply chain process.

[yayayo]

Banks are discovering that an existing technology like Bitcoin can be successfully replicated. Congratulation to that! It's nice to see that banks got something in return for their development funds.

However one question remains: What is the advantage of the proposed solution compared to just using a centralized database? Banks persistently refuse to use the truly decentralized blockchain of Bitcoin and invest millions for their own, private solutions. However there is no security/trust benefit of a centralized blockchain it just reduces efficiency.

To me it seems that bank executives are simply not understanding that the only reason for inventing the blockchain was to make a decentralized currency like Bitcoin possible. In contrast banks seem to think that it's somehow the other way around...

ya.ya.yo!