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Fintech Blockchain - more spoofing?

clearmurk

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So the Fintech industry is hooking up to blockchain. The Accountants are lining up, probably in an attempt to rehabilitate themselves post financial meltdown.

But the technology is complex, and there is little indication of the business case for service provision. Who is going to make money from micro-transaction fees when they have to do substantial processing to add items to some private blockchain?

Is this just more hype from a financial services industry few still regard?

https://hbr.org/2016/05/the-impact-of-the-blockchain-goes-beyond-financial-services
 


RasherHash

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Jan 16, 2013
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So the Fintech industry is hooking up to blockchain. The Accountants are lining up, probably in an attempt to rehabilitate themselves post financial meltdown.

But the technology is complex, and there is little indication of the business case for service provision. Who is going to make money from micro-transaction fees when they have to do substantial processing to add items to some private blockchain?

Is this just more hype from a financial services industry few still regard?

https://hbr.org/2016/05/the-impact-of-the-blockchain-goes-beyond-financial-services
So...are you selling something :confused:
 

sadcitizen

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I don't know why finance companies are so keen on it (aside from it being an easy way to get funding). Yes it solves problems for users of it, but all of these solutions revolve around *removing* financial institutions from financial transactions. Maybe they simply see it as a way to reduce capital expenditure and variable costs associated with the technology required to administer transactions, by foisting it upon computers around the world, I don't know.

What I do know is that it's currently a buzzword, so much like "The Cloud" and "Big Data", companies are applying the technology to areas that do not require it. Blockchain technology is only relevant to a specific and niche set of requirements, and it takes an enormous amount of computing power (globally) to maintain. So you'll stop hearing about it in a few years as people hone in on relevant, niche use-cases, and everybody else moves on to the next buzzword.

The next big thing related to this will be smart contracts and Distributed Autonomous Organisations, which run on top of blockchains. But it's taken a big hit in credibility this week as one of the biggest DAOs was heisted virtually, and $50m+ stolen via a simple bug.

Anyway, the blockchain hype is cringe.

(And presumably, like with Bitcoin, it'll continue to be miners around the world who receive money for processing payments)
 

clearmurk

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Big "like " for this.

From your link

Recently, I collaborated with colleagues at our firm to pen a contrarian viewpoint entitled "Can Trust-based Private Blockchains Be Trusted?". Our call-out was simple: permissioned or trust-based blockchains without the proof-of-work protocol provably do not deliver historical record immutability and are merely distributed databases impersonating blockchain technology. And since the article's debut, many blockchain development initiatives including the R3CEV group have fessed-up: they are not building blockchains at all. Investors take note.
 

sadcitizen

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It's also possible that financial companies are pre-empting the effect that Bitcoin etc will have on them, so are effectively taking ownership of blockchain tech via the "embrace extend extinguish" manoeuvre. The next step would be lobbying for, maybe, SEC oversight for blockchains to effectively outlaw unregulated cryptocurrencies. Or...maybe they see it as an ideal way to hide tax fraud (avoiding future Panama scandals) and so on via its anonymous nature? I don't know.
 

clearmurk

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I don't know why finance companies are so keen on it (aside from it being an easy way to get funding). Yes it solves problems for users of it, but all of these solutions revolve around *removing* financial institutions from financial transactions.
And there's the rub. If truly decentralised blockchain systems are to be used by banks, then the banks would be putting themselves out of business.

Which appears to lead to the conclusion in the prior link that there is some misselling of the concept going on.
 

Mad as Fish

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effer

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If you can understand how the EU works then Blockchain will be a walk in the park.
Is it any wonder why so many are topping themselves when one has to try understand such contrivances as the EU, Blockchain, Bitcoin or whatever ************************wittery some folk decide to come up with next.

Basically if financial or administrative procedures aren't simple enough for a child to understand, you can bet your life that somebody has orchestrated a mechanism for fraud. Have we learned nothing from our dealings with the EU and our fling with the global financial pyramid? Can't we be allowed to live by a code that says if it ain't simple, then please f off.
 

clearmurk

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It's also possible that financial companies are pre-empting the effect that Bitcoin etc will have on them, so are effectively taking ownership of blockchain tech via the "embrace extend extinguish" manoeuvre. The next step would be lobbying for, maybe, SEC oversight for blockchains to effectively outlaw unregulated cryptocurrencies. Or...maybe they see it as an ideal way to hide tax fraud (avoiding future Panama scandals) and so on via its anonymous nature? I don't know.
You might be onto something here.

An argument that, perhaps banks should be the only ones allowed to conduct blockchain type implementations on regular currency - because it's so powerful, like.
 

Accidental sock

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If I was a Superhero, 'Fintech Blockchain' would be the name of my mild-mannered alter ego.
 

Lumpy Talbot

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Twitter
No
I'm torn on this one. I like the elegance of the blockchain idea but I also agree that the opportunity for pseudo-blockchaining is there and most likely attractive to all the wrong sorts of people- investment bankers and other crims.

Been toying with the idea of a thread on Fintech and the stupendous elephant in the financial room which is massive over-valuation of tech sector start ups and stock generally.

Fascinating lately to watch the ludicrous analysis placing valuations on tech start ups- the whole 'unicorn' sector.

Not seen anything like it since mortgage based debt packages were being rated back in the mid noughties.
 

Mad as Fish

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I'm torn on this one. I like the elegance of the blockchain idea but I also agree that the opportunity for pseudo-blockchaining is there and most likely attractive to all the wrong sorts of people- investment bankers and other crims.

Been toying with the idea of a thread on Fintech and the stupendous elephant in the financial room which is massive over-valuation of tech sector start ups and stock generally.

Fascinating lately to watch the ludicrous analysis placing valuations on tech start ups- the whole 'unicorn' sector.


Not seen anything like it since mortgage based debt packages were being rated back in the mid noughties.
It's not as if they are not told that 90% fail -

Why startups fail, according to their founders - Fortune

And the top reason for failure?

They make products no one wants.


Well well well, who'd ever of thunk it!
 

HarshBuzz

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I'm torn on this one. I like the elegance of the blockchain idea but I also agree that the opportunity for pseudo-blockchaining is there and most likely attractive to all the wrong sorts of people- investment bankers and other crims.

Been toying with the idea of a thread on Fintech and the stupendous elephant in the financial room which is massive over-valuation of tech sector start ups and stock generally.

Fascinating lately to watch the ludicrous analysis placing valuations on tech start ups- the whole 'unicorn' sector.

Not seen anything like it since mortgage based debt packages were being rated back in the mid noughties.
The tech over-valuations aren't Fintech though. Fintech is actually a reasonably mature sector.

I'm with you on blockchain, the concept is beautiful. Let someone else do the hard work of bringing it to market though.
 

Orbit v2

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The blockchain concept works very well when applied to bitcoin but even there, possibly only up to the point where people can no longer make money directly from "mining" coins. Bitcoin will be a totally different (unproven) beast after that point. And the same applies to other uses of blockchain without a direct financial incentive.

Some people seem to think that blockchains are some wondrous technique for getting people to co-operate with each other when it isn't really. You have to look at the entirety of a blockchain application, and unless the whole thing works, then none of it does.
 


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