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Comment by AndrewBissell | Hacker News Reader

There's no point to a decentralized database like a blockchain when you run it from a handful of centralized chokepoints which are easily censored or pressured by political actors. You may as well just use a SQL database that everyone syncs up periodically. Bankcoins like Ripple are pointless.

People buy treasury bills when they care more about return OF capital than return ON capital. Bitcoin and gold are also solid assets in this regard, particularly because they are bearer assets that don't represent a liability or promise-to-pay by some third party.

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And yet, banks and financial institutions are vastly preferring blockchains that have been uniquely developed for their needs. There's very little appeal in simply accepting the transaction costs and times in bitcoin when you can spin up a version with whatever spec and interoperability you desire.

If by 'return of capital' you mean a propensity for an asset to retain its value, bitcoin is utterly inappropriate. Even gold is far too volatile and is only rationalised on those grounds against (very) long tail risk.

Their "preference" for "blockchain" is borne out of political necessity. I say this not to trivialize it, but to explain.

Banks are massive, massive institutions, and it is hard enough to coordinate people and resources within them, much less across them.

Back-office operations are indeed cumbersome and a major cost-center, and there is much value to be captured in simplifying all of it. If "blockchain" can serve a Schelling point to help get right people in these institutions to talk with one another so as to get on the same page, then there's a chance that some progress can be made towards solving these problems.

It's "blockchain" because "blockchain" is the new hotness, that's all. Any real world, inter-dealer distributed ledger will, in all practicality, be more like a cluster of SQL databases backing some kind of state-machine replication protocol than a cryptocurrency.

Happy BTC10k, by the way.

Well sure. Banks prefer blockchains because it provides the properties of a SQL database that everyone syncs up with. And this complicated, sql database by another name is vastly vastly preferable to the stuff that banks are doing now.

Yes, the fact that blockchains act as a public database is way way better than the outdated stuff that banks spend billions of dollars on. But it is still not the 'innovative' and interesting part of blockchains.

I'd be tempted to agree with you if companies like Axoni aren't getting funded by many large banks, while Bank of America has file 20+ block chain related patents.

For -no interest- $20mil in funding and an industry work group seem like -interest-

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