Olga Zeveleva
December 2017.

What makes blockchain better than other systems for encoding transactions, and why is it increasingly being adopted by big banks?

1 answer

I’m not convinced that blockchain is better for banks, but there are some things that I can see helping the big banks. One is payment processing. If you are distributing this payment processing system over many different notes, it’s feasibly easier to secure than having a centralised system. Second is just keeping the accounts is simplified when everything is laid out in the open.

There is a new proposal called RS Coin, which tries to serve as the intermediary currency between the big banks, or central banks. That simplifies account-keeping, rather than having this double bookkeeping system that we’ve been using for centuries. And it’s also verifiable between all the central banks, which do not necessarily trust each other.

I see blockchains being used more as a backend technology rather than they technology that is going to be touching consumers. So you and I will probably continue using Visa and MasterCard the way we’ve been using them, but banks themselves might internally use blockchain to secure their databases.