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So much for Blockchain's real life use cases (lemmy.ml)

submitted 4 months ago by [email protected] to c/[email protected]

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[–] [email protected] 24 points 4 months ago (14 children)

A banking system running on Blockchain

Is an astronomically terrible idea. It:

would use as much electricity as an entire country
payments/transfers would be both much slower AND much more expensive than via a bank
would have no protection against fraud. You got scammed? Your money's gone. You paid for something online and it never arrived? Too bad
would have no way to stop money laundering
would have no way to help people who forgot their password, they'd just lose their life savings permanently
would tie up a bunch of capital, preventing reinvestment and growth. There would be no way to get a bank loan to buy a house for example
the list goes on

[–] RedDoozer -3 points 4 months ago (7 children)

All your points are about an obsolete idea of Bitcoin, a PoW public blockchain. A PoS private blockchain with private keys not handled by the users would invalidate your entire list.

[–] [email protected] 1 points 4 months ago (1 children)

All my points? That's a bit rich

You make a good point that PoS would solve one of the issues I raised which is electricity usage.

In theory it could also increase throughput and reduce costs, but: a) in practice that hasn't happened yet despite years of development, b) it's never going to be as efficient as a centralised system because of the extra overheads necessary to decentralise it, so that point still stands

All my other points still stand as well, plus the additional problems PoS creates to do with centralisation of power

[–] RedDoozer 1 points 4 months ago

The keyword is "private." The redundant system all the banks maintain can be reduced to a private, permissioned blockchain, creating a network for the banking system to handle their own transactions in addition to a seamless inter-bank communication.

I doubt a network for just one bank can be that useful compared to the current situation.

Also, I'd say that every bank has (had?) a team researching the blockchain.

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