Challange accepted, here is my take.
1. The banking industry is highly regulated and banks are naturally very cautious. Most of the big banks are piloting the technology and cautiously dipping their toes into the water.
BitShares provides a democratic, hardcoded governance system that serves as the fundament for future regulatory constructions. With the delegated proof of stake (DPOS) baked in, governments and regulators can build any kind of governance system on top of DPOS and comply with changing regulations. BitShares provides the banking industry a flexible framework for governance, security, regulation and compliance.
The BitShares Blockchain is driven by the consents of all major institutions who represent the best interest for the whole ecosystem.
2. Scalability. Visa today handles about 2000 transactions every second. Blockchain for bitcoin is currently limited to four to seven transactions per second because the protocols in bitcoin limit the size of transactions blocks to 1mb. Obviously, a major limitation, although some of those organizations mentioned above are working on solutions to scale blockchain. Bitshare, for example, claims to be able to process 100,000 TPS.
Scalability and security are going hand in hand with BitShares. Through the DPOS system, BitShares is able to scale up to 100,000 TPS guaranteed by a multi-level security system. Thanks to advanced Blockchain engineering BitShares is even able to process all transactions on chain and could speed up by magnitudes with an off-site processing and batch processing of transactions. Even a variation of high-frequency trading, instant trade settling, and reconsilidation would be possible on the BitShares Blockchain.
3. Security. While extremely secure, the technology implementation of something like bitcoin is unregulated. A group of individuals with gigantic computing power could theoretically establish their own chains as a definitive version and hijack the bitcoin block chain.
Security is one of the major aspects of every Blockchain. The BitShares Blockchain solved most common security problems through their innovative DPOS security system.
To protect the network, every BitShares shareholder has the right to vote for those parties that represent their interest the best. Witnesses (miners) and Committee Members (Board of Director) are actually campaigning for a public service and only the most trusted parties will be selected to represent the BitShares ecosystem.
In conclusion, security in the BitShares system is guaranteed by the commitment and responsibility of the selected parties. We will see a broad range of official and private institutions stepping up in the BitShares ecosystem to serve the network in their best interest. DPOS is one of the most democratic governance systems as of today!
4. Bitcoin implementation is decentralized and unregulated. This creates mistrust and if things go wrong. Who do you sue? How do you implement compliance, anti-money laundering, and know-your-customer regulations?
The BitShares platform is a full grate banking / exchange platform that offers retail and commercial banking solutions via public API!
Every bank can choose the right applications suitable for their individual business use case: account monitoring and management, multi-level account security, transaction auditing, multiple types of transfers (e.a. P2P, domestic, international), scheduled and recurring payments, personal user dashboards, chat, forex, stocks, fully AML/KYC control with account white/black listing. Banks can issue E-Money, and take full control over their own assets on the Blockchain. BitShares will even provide advanced privacy features to guarantee HNWI, Governments, Chartities and Corporations 100% anonymity and privacy on a Blockchain.
5. The implementation and use of blockchain solutions are very new. There are also very few people who really understand it and what its capabilities and limitations really are.
The future of banking and blockchain is the adventure of our century. Blockchain is a backend technology like ICP and will power the future of banking behind the curtains. Banks, Business, and Corporations are well advised to avoid market any complicated Blockchain terminology. Only a few experts understand how nuclear reactors works, how cold fusion will power the future centuries.
We need to explore, experiment and grew into the future of Blockchains. BitShares is one of the best testing grounds for scalable, fast and secure Blockchain solutions.
6. For blockchain technology to be effective it relies on cooperation and co-ordination. How likely is it banks all over the world competing for the same customers with similar products will choose to truly co-operate? One could argue they already have with SWIFT but this requires a standard for them to agree on and its early days for this to occur.
There is a market for everybody. Similar to the automotive industry, the Blockchain industry will develop a multiverse of code applications, each matching individuals demands, business cases and visions. BitShares is one application of the Graphene Blockchain toolkit. Over the years we will see more graphene implementation like Steem, Muse and Peerplays. The Blockchain industry will grow and we will see different solutions.
It should be our primary goal to provide bridges, sidechains, between each Blockchain, so that value can jump Blockchains and we can create the trusted web of value.
7. Human nature. The saying from the 1980’s, “No one ever got fired for buying IBM”, still applies, especially in highly risk-averse regulated industries like banking.
We are not living in the 1980´s anymore. Globalization and the digital revolution has changed and speed up the innovation game for all industries. The banking industry is struggling through digitalisation and emerging technologies like Blockchain. Only banks who will adopt to new technologies like blockchain will be able to stay competitive on the global market. If you don´t invest in IBM today, Huawai will buy it tomorrow.
Adopting blockchain-based payment processing will require leaps of faith and risk sadly very few will undertake at a large scale until it is forced on them.
Let’s say you a CIO and decide to take this leap of faith, who do you pick to take it with? Ripple, R3CEV, Bankchain, TRUST, Sidechains, Bitshare, HyperLedger, SWIFT GPII ? It’s early days and too soon to pick a winner. Beta or VHS ? USB3 vs Firewire vs Thunderbolt ? It may well be too soon to decide.
Pick the technology that matches your needs the best or innovates.
8. Regulation could conceivably be part of the solution. The creation of a central governing body to regulate the financial services blockchain and its membership could help, but if history holds true, by the time this happens some new disruptive technology will probably be in place.
The market requires a platform that is able to adopt to the todays world affairs. Banks are looking for a Blockchain solution that can grow with new demands, challenges and technologies. The BitShares Blockchain matches these demands thanks to the innovative DPOS governance system. An Consortium of elected committee members , individuals or institutions, have the power to add innovative new features to the core toolkit of BitShares. Every business has the power by vote to suggest new features to the committee.
The BitShares Blockchain is open to all kind of corporations, institutions, and individuals via API. You choose which plug & play tools you want to use.
9. While complex and costly, the current banking infrastructure that securely and safely transfers our money works very well. Unwinding this is unlikely to make it to the top of too many banks CEOs to-do lists in the short- to medium-term.
It would be foolish to stop innovate in the banking industry. The banking industry is consolidating the market because three main factors are under attack. Revenue, Capital, and Liquidity.
The current business models that create revenue for banks does not work with 0% interest policies. (ZIP)
Capital is expensive and new AML and fraud regulations cost billions USD every year, eating all profits from regular banks.
New min liquidity requirements force banks to hold a large amount in cash to prevent future bank runs. With negative interest rates at central banks, fractional reserve banking, and limited vault space, banks are seeking for new innovative solutions.
Every bankers CEO, CTO, CIO who does not have Blockchain solutions as the priority on his short-term list should be fired, because he is responsible for the future failure of his company. Every serious banker knows these problems. Banks who do not adopt to distributed leger (blockchain) technologies will be extinct in the next 20 years.
Topic: 9 reasons why Banks should use BitShares Blockchain - comments needed (Read 2712 times)
