Bitcoin may be good, but distributed ledger technology is where strategic investment is headed

[DarkHeretic]

Distributed or shared ledger technology describes the transplantation of the more transparent, more secure, lower-cost technology behind Bitcoin to legacy, centralized financial services.

It was recently publicized that Visa, Citi, Nasdaq, Capital One, Fiserv, Orange, et al, have invested $30 million in Chain.com, a blockchain developer platform that serves the enterprise market.

Last spring, Chain.com announced that it is working with Nasdaq to test the trading of shares in private companies using distributed ledger technology in a pilot set to launch this November.

“You can envision a system where NASDAQ, Citi and Fiserv are all part of a network, and a system were Capital One and Orange are part of a network.”

 

[Bloomie]

Dat domain

 

[Erdogan]

The distributed ledger is a pretty good invention by itself, but without the mining reward in the form of the coin itself, it is just a system that is protected against a single point of failure.

That is still good, and it will be a progression over current systems. By the way, mr Byrne of Overstock.com is up front with the Medici exchange.

 

[cypherdoc]

@Erdogan

i'm not sure how good it will be. the big players say upfront that they'll need a trusted group of players which makes perfect sense since what they're designing isn't a trustless system. in that sense, it's no better than a shared SQL database. given that the 2008 crisis showed us just how much distrust exists btwn major players (never would have guessed, seriously) i find it hard to see how they will coordinate a blockchain w/o the monetary unit incentive that goes into driving the POW function that secures Bitcoin.

i think in the long run that the great financial institutions will be forced to use Bitcoin itself. but first, it has to show it can evolve and grow. we got business to do with the blocksize right now.

 

[Erdogan]

I imagine that the added value is a distributed consensus by randomness, just like our blockchain. The difference is that the actors have mostly the same hashing power, the bourses and the brokers. To join the system, you have to have a miner of some defined capacity. One or more brokers going down, or a network split, will be taken care of by the longest chain. I think it is better than a distributed database, it is really difficult to design something that has no single point of failure at all. Still with a blockchain, there can possibly be a software failure that takes it all down. Like our bitcoin system, they need also to diversify the software.

 

[cypherdoc]

I don't see mining entering the picture at all.

Users will interact with the same trading software they have always used but internally the banks will record the trades on a proprietary blockchain that they manually update ala Ripple style.

 

[cbeast]

This sounds like something that can be Goxed with ease.

 

[Beanow]

A proprietary theoretical implementation backed by money and the trust of financial institutions, to me is worth nothing compared to a working solution backed by an open-source community and cryptography instead of trust.

I'll have them prove it first. See if their millions can make something better than a free approach.