8 years ago
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One of the world's biggest banks just admitted bitcoin could destroy existing finance firms
French bank BNP Paribas says the technology underpinning bitcoin has the potential to make existing companies "redundant," a huge admission from one of the world's biggest banks. Analyst Johann Palychata writes in the company's magazine Quintessence that bitcoin's blockchain, the software that allows the digital currency to function, "should be considered as an invention like the steam or combustion engine," that has the potential to transform the world of finance and beyond.
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Most stories I've read about bitcoin tend to focus on the sensational, boom or bust aspect of cryptocurrencies. It's nice to see an article address that its the underlying tech that is really the important thing. Having a distributed system of trust that is based on mathematical principals is crazy powerful. I'm very eager to see what becomes of that tech in its 4th and 5th big iterations.
As a person who hasn't really used any cryptocurrency and has only done enough research into it to know how it basically works I am interested to know what is the next big iteration that is on the horizon? I am just curious as to how you would expand on this past what bitcoin and other cryptocurriencies already do.
I'm pretty sure (though it's just speculation), that Bitcoin itself would just evolve. It is an open-source, ongoing project after all. The main reason though is that a totally viable and healthy blockchain network already exists: the bitcoin network. Any major changes or "new features" would do better to just be incorporated into the main protocol vs building another network. The entire point of a blockchain network is distribution; if you want sole control of it, you'd just run it off a server rather than P2P in a network you can't mess with.
I was thinking more along the lines of adapting the tech to things you wouldn't immediately think of. Using the idea of distributed trust to create a lightweight escrow service for example. Bitcoin is the pioneer of the tech, but its uses go beyond a currency format.
Indeed they do. You can encode information in the blockchain already, and hopefully it would scale up with increased use. One of the uses that is more immediately feasible is maintaining a deed registry on the blockchain, which would be pretty easy. But that's part of the evolution.
We're seeing Bitcoin/blockchain tech in it's absolute infancy. It could die, sure, but if it doesn't it could grow into something we couldn't imagine.
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These two paragraphs are the most important in the whole article. The ability to trade financial assets directly have existed for a long time, still people rely on brokers for the added layer of security and legal protection. Brokers also help avoid some of the complexities of the financial market.
Technology itself is an example of this. Networked computer have the ability to trade information directly between each other, butbmost people still rely on "data brokers" such as Gmail, Dropbox and others. Why ? because they simplify the process and add a sense of security.
Palychata is right on the money here. Banks and brokers will continue to exist, only their tools that will change to increase the efficiency of the process.
It needs to be easy enough to use that my grandmother can understand it. Worst case scenario isn't possible until that happens. When someone comes out with a cryptocurrency backed credit card system that granny can just swipe at the grocery store and either easily reload, or attach it to an existing account, it will likely still be the banks behind it.
Forgive me for being ignorant, but why can't these professions just adapt? Less computer savvy people will want others to bridge the gap for them, and banks can use their existing structure but just with BitCoin instead?