From 1993 to 2009 Bill Gates invested $1B+ into Encarta the online encyclopedia but was eventually crushed by Wikipedia. This should be a lesson for financial institutions trying to understand Bitcoin. Currently BTC is where Wikipedia was in the early 2000`s. Watch out banks.

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How is blockchain technology useful for traditional financial institutions? [duplicate]

This question already has an answer here:

This may not be the right question for this forum. If so, please let me know where I should post it.

There is a lot of interest in “traditional financial institutions” like banks, credit card companies etc. around blockchain technology. I don’t quite get why. As I see it, the main innovation in Bitcoin is blockchain technology, and its purpose is to enable trustless, permissionless consensus achieved with pseudonymous validators; and it works well with “on-chain” assets like cryptocurrency. However, in the world of traditional finance, all participants are already authenticated and entities like validators require legal identities. “Off-chain” assets like real estate and securities in the real world already map to off-chain jurisprudence. The information on the blockchain about “who-owns-what” for these assets has to have a one-to-one correspondence with what the law says. Therefore, achieving trustless, permissionless consensus with pseudonymous validators is not a requirement.

The traditional financial system is built around trusted third parties and permissioned identity management systems – and permissioned, distributed ledgers are just the existing banking system. So what is the additional value that blockchain technology brings to the traditional financial network? Why are the these institutions falling over themselves in trying to bend, squeeze and twist this technology to fit it into their work processes? Aren’t they just trying to fit a square peg into a round hole?

Thanks for any light that someone can throw on this.

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I decided to create this “Art Piece” as a reminder that Central Banks and Economic Policy are not Sciences. They are political institutions that exert control over a population for the benefit of those people who most influence their decisions, those people more often than not being rich or powerful

I decided to create this "Art Piece" as a reminder that Central Banks and Economic Policy are not Sciences. They are political institutions that exert control over a population for the benefit of those people who most influence their decisions, those people more often than not being rich or powerful submitted by /u/Cryptolution
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