9 Major Investment Banks Team Up for Blockchain Tech Initiative Glenn Hutchins, co-founder of Silver Lake Partners, a $26 billion private equity firm raised an important point regarding the rising interests of banks towards the blockchain technology during the technical discussions about the future of distributed ledger technology in a roundtable conference hosted by Brookings Institution.
“The private ledger is equivalent to the intranet. Remember when we first had intranet? it was kind of good because you could collaborate with people you work with but it didn’t transform things until everybody was connected in the seamless world wide web. To think that we can have private blockhains and use that, that makes the banks happy because that gets their costs down. I wouldn’t listen much to that kind of stuff,” explained Hutchins.
Essentially, banks and leading financial institutions are trying to embrace the Bitcoin blockchain technology to reduce IT management costs and facilitate robust yet cost-efficient transactions. By replacing bitcoin with another token or a store of value, and deploying their own centralized blockchain networks, banks are trying to develop a new generation blockchain-based financial system for intuitive and real-time settlement and transfer of payments and assets.
However, Hutchins emphasize that Bitcoin is more like copper, not gold. The blockchain cannot exist without the currency Bitcoin, as electronics cannot exist without copper.
The reason behind this analogy is, Bitcoin as a network token is utilized in the blockchain network to transfer value amongst users. The value of Bitcoin derives from its demand and the unprecedented level of security formed by millions of miners worldwide. A technology and an independent currency at this magnitude are not products that can be developed or deployed by a centralized organization. This is the precise factor behind the value of Bitcoin and its dominance against other cryptocurrencies.
“I think […]
