One of the most salient features of our Tech Hiring culture is that there is so much bullshit. Everyone knows this. Each of us contributes his share. But we tend to take the situation for granted.
...and that's exactly what the financial industry needs.
You might trust your bank, yes. I might trust my bank as well. But does my bank trust your bank? Should they trust each other...? In 2008 we've seen that the collapse of Lehman Brothers triggered a global financial crisis. Now imagine how much worse this would've been if banks weren't suspicious of each other, but trusted each other, if all banks had trusted Lehman Brothers. A domino effect much worse...
Maybe the infrastructure between financial institutions is the only other real use case for blockchains besides Bitcoin, but it's huge. In the aftermath of 2008 regulators have pushed the markets towards central clearing partners for better transparency of the risks in the derivatives market. But now these central clearing partners are a risk themselves since they have become the trusted party for trades with a volume of hundreds of trillions USD. A huge systemic risk!
The trust(less) model of blockchains represent the trust model between financial institutions and provide a solution to resolve the systemic risk of central counterparties without creating new central intermediaries. And that's why banks have started to love blockchains.
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We're a place where coders share, stay up-to-date and grow their careers.
But if we have trusted actors, we don't need the blockchain! We can record transaction in decentralized Merkle tree structures like git repositories.
Behind Bitcoin lays the ideology that trust cannot and should not be built.
...and that's exactly what the financial industry needs.
You might trust your bank, yes. I might trust my bank as well. But does my bank trust your bank? Should they trust each other...? In 2008 we've seen that the collapse of Lehman Brothers triggered a global financial crisis. Now imagine how much worse this would've been if banks weren't suspicious of each other, but trusted each other, if all banks had trusted Lehman Brothers. A domino effect much worse...
Maybe the infrastructure between financial institutions is the only other real use case for blockchains besides Bitcoin, but it's huge. In the aftermath of 2008 regulators have pushed the markets towards central clearing partners for better transparency of the risks in the derivatives market. But now these central clearing partners are a risk themselves since they have become the trusted party for trades with a volume of hundreds of trillions USD. A huge systemic risk!
The trust(less) model of blockchains represent the trust model between financial institutions and provide a solution to resolve the systemic risk of central counterparties without creating new central intermediaries. And that's why banks have started to love blockchains.