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Comment by patrickk | Hacker News Reader

> Their needs are already well met and there's little incentive to change.

This is definitely not true. It takes some financial assets 3-5 days to settle after the initial transaction goes through, weaving its way through many database systems (some many decades old) and middlemen who each take a cut, e.g. clearing houses. Any established industry has lots of cruft that builds up.

For this reason Santander estimates that banks can save $15-20bn per year collectively by using blockchain technologies to make their infrastructure more efficient[1][2]

[1] http://www.coindesk.com/santander-blockchain-tech-can-save-b...

[2] http://santanderinnoventures.com/fintech2/

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That 1-5 days to settle isn't due to slow and disconnected systems though, which is what many looking from a tech perspective believe. Most financial transactions are matched in settlement systems the same day they are traded. The 3-5 days is for prefunding of underlying accounts, tear ups and other asset class idiosyncratic reasons.

I agree that the current systems are very far from optimised. But what benefit does the blockchain per se give them, given they already trust all participants? It only seems to introduce unnecessary costs, such as mining, when compared to the alternatives.

> It only seems to introduce unnecessary costs, such as mining

Who says you need mining? There's different ways to achieve blockchain consensus, such as proof of stake or proof of existence, you don't need proof of work like Bitcoin uses. Since with a private banking settlement blockchain you know in advance who the players are (individually-invited banks) you can give them a percentage of the network and have each node verify the transactions across the network. You could even give nodes to regulators or consumer advocacy groups to achieve regulatory compliance or consumer oversight if required.

As for cost, you could technically run a PoS node with a raspberry pi, a large USB drive, a wifi connection, powered by a solar panel and an old car battery on the roof of a building. Proof of stake only needs minimal computing power and a persistent internet connection.

Seriously, a lot of the scorn heaped on blockchain technology is unwarranted. Yes, there's loads of hype and bullshit (we're going to get rid of nation states and fiat currency!!!1!), but no more than the internet in 1994 or during the dotcom boom. Yes, lots of crap ideas, but some gems too. It's too early to see what real impact it will have. Criticising current blockchain technology is like criticising early broadband or smartphones.

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