The future of banking industry in blockchain

[btc_love]

Hey.
Yesterday I read an article about banks that began to use blockchain and there was pretty impressive list.
They're also described successful cases of using blockchain in banks (if you're interested - here's the article), so I may assume that using blockchain in bank's system is only a matter of time (and money, of course).

Now, the question: why it takes THAT long the smaller banks to go the same way and start using the blockchain?

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[The Sceptical Chymist]

Now, the question: why it takes THAT long the smaller banks to go the same way and start using the blockchain?

I don't know if you mean the "mom-and-pop" banks that only have branches in a few towns (it's common in my country), but if that's the case I would assume that they want to see if the big banks have any success with blockchain utilization before they jump in.  Smaller banks generally have much smaller capital and aren't likely to venture into uncharted territory unless the risk is very low compared to the reward. 

Anyway, I think it's great if banks are actually starting to use blockchains (and it's about time)--but it doesn't really affect bitcoin, which is my main area of interest.  Banks are going to be using blockchains as a ledger for their fiat business if I'm understanding this correctly, and they're NOT getting involved in cryptocurrency.  I wouldn't exactly want to keep my bitcoin with a bank, but I would like to see such a service offered simply because it would be another step in bitcoin's mass adoption.  Don't know if that's ever going to happen, but I bet they'll get involved in the futures markets well before they allow their customers to deposit any real crypto with them.  But we'll see.

[mu_enrico]

Now, the question: why it takes THAT long the smaller banks to go the same way and start using the blockchain?

It's difficult to solve the so-called "trilemma" in the "blockchain technology," i.e., scalability, security, and decentralization. In Bitcoin, we have the best security and decentralization, but we still struggle with scalability.

In DLT and mentioned use cases, I think they (companies/consortium) will find it difficult to make it secure and decentralized enough, but yes, they can achieve high TPS. Thus if it's not secure and decentralized, why not simply use distributed database?

The questions are still pretty much the same:
- who can be validators?
- how to solve disputes (consensus)?
- what're the incentives (to validate and to secure the network)?

These are top-level issues that very difficult to answer (in term of the system as a whole). Hence, many people argue that there is no "blockchain technology" because it's a technological dead-end.

[avikz]

The questions are still pretty much the same:
- who can be validators?
- how to solve disputes (consensus)?
- what're the incentives (to validate and to secure the network)?

These are top-level issues that very difficult to answer (in term of the system as a whole). Hence, many people argue that there is no "blockchain technology" because it's a technological dead-end.

The answer to the questions is also same - The Bank itself!

A bank adopting blockchain technology will have no connection with the current blockchain consensus like POW or POS! Banks can't afford to have their funds controlled by any third party other than the central bank of that country. So for a full fledged integration of blockchain technology, banks will have to create a tailor made blockchain that they can control without any intervention! It requires a huge amount of money for building and maintaining such things and hence majority of smaller banks are backing off right at this moment! Probably they are waiting for a global banking standard on blockchain to be initiated and created by the leading players first so that they can follow their path! Implementing end-to-end blockchain into banking system is easier said than done!

[1Referee]

I honestly don't really care much about banks adopting blockchain or new database technology as long as they aren't socializing the benefits so that their clients can finally enjoy a better service at lower cost. Banks have more incentive to not share the efficiency benefits with their clients so that they keep paying the full price for the services they are already familiar with.

More broadly speaking, the blockchain technology isn't a wonder pill that solves every problem in the world. It really seems that people have jumped on the buzz without even realizing what it actually is. The blockchain is more a buzzword that companies use to attract capital than it is something that enjoys much real world use.

[vintages]

Now, the question: why it takes THAT long the smaller banks to go the same way and start using the blockchain?

The are two possible answers to this.
First, is because the blockchain technology is somewhat a new technology and many are not yet familiar with it or how to implement it. Just like every new emerging technology, it will take time before it massive usage.

Second, another possible explanation to this is that the bank (probably) are scared of too much transparency or exposure. One of the high benefits of the blockchain is transparency. With it, many people can see how the bank runs their business and their money and too much question will certainly arise. So, I guess this makes them have a second thought.

[carter34]

Now, the question: why it takes THAT long the smaller banks to go the same way and start using the blockchain?

My own view to this; is like if you can't beat them, then you have no choice than to join the queue. I think this is what has happened to those smaller banks you are talking about.
You know that we are in a competitive world where everybody wants to survive (if we still remember the survival of the fittest theory). So the small banks also want to survive, they have to join to stay in business.

[Mahanton]

Hey.
Yesterday I read an article about banks that began to use blockchain and there was pretty impressive list.
They're also described successful cases of using blockchain in banks (if you're interested - here's the article), so I may assume that using blockchain in bank's system is only a matter of time (and money, of course).

Now, the question: why it takes THAT long the smaller banks to go the same way and start using the blockchain?

Good to hear out that there are already banks who do make use of blockchain technology into these institutions knowing that they do mostly
see this tech to be cons since it do give out publicity on all sorts of transactions been made by the bank.We know on how underground transactions works
which these banks been involved too but somehow even there are banks already embracing this tech but i do still highly believe that it would still takes
time for majority of them on considering to apply this one.

[sunsilk]

Now, the question: why it takes THAT long the smaller banks to go the same way and start using the blockchain?

There's the keyword which is 'smaller'.

The smaller ones are just following the right of way of the bigger and established banks. If they can see that it has been effective to them then they will follow as well. But right now, I think adopting blockchain isn't their focus.

They have other things to focus such as expanding their sales and getting more depositors. So the promo's and other bank products are the ones that they have keeping an eye for but soon when they have had enough and can now move on for focusing to blockchain, they'll do it.

[davinchi]

why it takes THAT long the smaller banks to go the same way and start using the blockchain?

If banks are applying blockchain to their already existing services, and they are thankful of it, then we have nothing to worry about, because this adoption of cryptocurrency we are talking about will start from the bank, if we can get the support of banks, then government too would definitely be giving us their support, because one of the greatest fear of financial institutions is that it would disrupt their services, but if they have tested it and it has not caused any harm or damage to them, then I think that we are just few  miles away from getting the regulation of cryptocurrency that we need.

There are still other areas that blockchain covers, and I am sure that from here, the government also will look into that area and probably develop on it.

[adzino]

Hey.
Yesterday I read an article about banks that began to use blockchain and there was pretty impressive list.
They're also described successful cases of using blockchain in banks (if you're interested - here's the article), so I may assume that using blockchain in bank's system is only a matter of time (and money, of course).

Now, the question: why it takes THAT long the smaller banks to go the same way and start using the blockchain?

Because smaller banks don't want to risk anything. They are already considered "small", so any wrong move made by them might end up being disastrous and chaotic for them. Moreover, it is easy to say than to do it. They might need to change the whole infrastructure of their banking system if they will want to implement the blockchain technology. They will have to spend a lot which won't actually be possible by them.

[bitcoinposts]

Ripple Blockchain is providing all the necessary tools for banking industry and  more future we will see more blockchain platforms will ease banking operations to blockchain based applications

[NoFace01]

Some banks will have to leave fiat and deal with cryptocurrency, this will be a very difficult step because most banks are centralized.

[bitsurfer2014]

Hey.
Yesterday I read an article about banks that began to use blockchain and there was pretty impressive list.
They're also described successful cases of using blockchain in banks (if you're interested - here's the article), so I may assume that using blockchain in bank's system is only a matter of time (and money, of course).

Now, the question: why it takes THAT long the smaller banks to go the same way and start using the blockchain?

Because smaller banks don't want to risk anything. They are already considered "small", so any wrong move made by them might end up being disastrous and chaotic for them. Moreover, it is easy to say than to do it. They might need to change the whole infrastructure of their banking system if they will want to implement the blockchain technology. They will have to spend a lot which won't actually be possible by them.

I guess there is an air of hesitation to adopt blockchain technology on some of these banking folks. Moreover, most of the upper

management of these smaller banks are "legacy people" and most are often resistant to change since share a common belief on

the popular adage that states "if it ain't broken, don' fix it" which is true in most cases involving people in the banking industry.

[Theb]

It's as simple as asking yourself if the return on investment would be good if they integrated their system with blockchain. The way I see it is there are two types of "small banks" the first one is the rural banks who only cater a region or a city and the other ones are already part of a big group of banks as a subsidiary both of which have a small client base where a blockchain system won't be needed because they'll just be incurring more cost for a little to no improvement with their business.

[el kaka22]

Time is the most important part of this. We are talking about countless trillion dollars worth of sector here and that market can't change into blockchain over time, even if they really want to, even if they agree to, there is really no possible way to actually move to blockchain before 5 years, even the highest amount of investments to it and hiring thousands of people to it, the earliest we can have blockchain on banks fully is 5 years, possibly a lot more.

Now, think how they will want to slowly transition instead of rushing into it and you can understand why it will take at least a decade to move there. That is why I honestly believe that if given enough time, banks already like blockchain, they see it as a great feature for their banks, its just gonna take some time.

[jrrsparkles]

Blockchain technology has lot of applications and the article you mentioned is about transactions using blockchain technology which is simply as crypto currency but the difference is centralized or decentralized.If banks go with the centralized cryptos made by them or government then they are not changing anything other than the form of transactions but if the new change means then it should comes with decentralized body.

[pixie85]

Ripple Blockchain is providing all the necessary tools for banking industry and  more future we will see more blockchain platforms will ease banking operations to blockchain based applications

And the question is: why is XRP losing so much value? Is the banking uninterested?

Blockchain is overrated. It's great to hold information but not so great for banking.

[hatshepsut93]

If this was the case, banks would be already actively working on it, they would show some prototypes, make network tests, create joint groups and so on - but there's nothing like that now. All we had in these years is just a few banks saying that they are interested in blockchain and nothing more. Maybe it all was just a stunt to boost their image, as blockchain was very hyped in 2017. Anyway, blockchain has to prove itself on a smaller scale first, but it failed to do so for many years already.

[Ozero]

Hey.
Yesterday I read an article about banks that began to use blockchain and there was pretty impressive list.
They're also described successful cases of using blockchain in banks (if you're interested - here's the article), so I may assume that using blockchain in bank's system is only a matter of time (and money, of course).

Now, the question: why it takes THAT long the smaller banks to go the same way and start using the blockchain?

Banks are very conservative in nature. They do not like to change the rules of the game, because it is connected with finances, where peace and stability are valued. In addition, banks operate clearly based on government instructions. They cannot change these rules themselves, because in this case they will pay large penalties. In turn, the government is in no hurry to do this, because for this, you first need to legalize cryptocurrency, and this is a new type of financial relationship that, moreover, is not needed for them. Thus, a number of circumstances delay the introduction of cryptocurrency in the banking sector.