Isn't there a fundamental difference between a public blockchain (bitcoin) and a private blockchain? Private blockchains are not really open ledgers and are a little different than blockchains that are independent of banks.
Yes and there is an argument that it would be cheaper and more efficient for the banks to use their current systems or use a database. Also why would the banks use a blockchain? That would mean that they would have to share their data to all the other banks. Do the banks really trust each other that much? What secures this private blockchain, is it also proof or work? I cannot imagine a real blockchain without proof of work.
its not Proof of Work(PoW), but Practical Byzantine Fault Tolerance (PBFT)
http://www.coindesk.com/digital-asset-new-details-hyperledger-blockchain-platform/Byzantine fault tolerance
Digital Asset also confirmed it would be utilizing a consensus system that offered an alternative to proof-of-work mining. The process, pioneered in bitcoin, uses a decentralized network of computers to secure the bitcoin blockchain and process transactions.
Digital Asset said Hyperledger includes a "prototype implementation" of the Practical Byzantine Fault Tolerance consensus module, which would serve as an alternative to the mining process.
"We are collaborating with many of the other members of the project on the consensus module to ensure there is a scalable, secure, Byzantine Fault Tolerant consensus protocol that can provide settlement finality for wholesale financial institutions," the release said.
http://www.coindesk.com/stellar-ripple-hyperledger-rivals-bitcoin-proof-work/Each node publishes a public key. Any message coming through the node is signed by the node to verify its format. Once enough responses that are identical are reached, then you can agree that is a valid transaction.
the reason it is cheaper and better, is simple. they can sack their own internal security/auditors/investigators. by automating it they can reduce other security aspects needed in each bank branch and reduce the central servers needed at a head office to being just a few small computers dotted around the country.
but Practical Byzantine Fault Tolerance (PBFT) is in someways less secure than PoW, and also the hyper ledger will be missing some of the other 10 security features that make bitcoin bitcoin.
after all "blockchain" is just 1 out of 10.. 10% of the security feature that makes bitcoin. which is why it will only be a closed system to reduce some of the risks compared to what would be required if it was an open system
