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Adam Montana 11 Jan 2017


Adam Montana
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Bitcoin... Which of these fits you best?  

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(by thunderhawk)

Swift is Building a Blockchain App to Optimize Global Cash Liquidity
Inline image 1
A global platform that connects the vast majority of the world's banks has begun building a blockchain application to simplify cross-border payments.
 
Announced today, The Society for Worldwide Interbank Financial Telecommunication (Swift) is integrating open-source blockchain technology with its own products to build a proof-of-concept that might one day replace the so-called "nostro" accounts its members keep filled with cash all over the world – just in case they need it.
 
If successful, the blockchain application has the potential to finally achieve a longstanding dream of Swift, to free up that cash so it can be invested in more profitable measures.
 
Speaking with CoinDesk, the company's head of banking markets, Wim Raymaekers, explained what a successful test of distributed ledger technology (DLT) might mean to his clients.
 
Raymaekers said:
 
"We’re going to use DLT as a proof-of-concept to synchronize those databases in real-time, so that banks can optimize their liquidity globally."
 
Currently, Swift’s network of 11,000 financial institutions monitor their accounts around the world using the platform's existing debit and credit updates via end-of-day statements.
 
The maintenance of these accounts accounts for a "significant portion of the cost of making cross-border payments," according to a statement. Exactly how much of that cost could be save with blockchain, Raymaekers said, was unclear.
 
"That’s what we’re looking for in conclusion of this proof of concept," he said.
 
Specifically, Swift hopes to reduce the costs of reconciliation between independent databases maintained by the inter-bank platform's members, reduce operational costs and free up liquidity for other investments.
 
The experiments appear to be part of a larger exploration of various blockchain solutions.
 
An earlier blockchain POC designed to test the potential benefits and plausibility of moving the ISO 20022 standard to a blockchain, for example, was built using open-source Monax's codebase.
 
This most recent blockchain proof-of-concept will leverage the open-source Hyperledger codebase, being developed by a consortium of businesses, of which Swift is a member.
 
The POC will also consist of a private blockchain for invited members with specific user profiles and "strong" data controls. Last year, banking consortium R3CEV and a dozen of its member banks tested Ripple's native asset, XRP, to serve a similar function.
 
In Swift's case, though, only authorized members will be able to access the POC, which will be integrated with Swift’s own identity management platform and its public key infrastructure (PKI), a security architecture based on cryptographically verified digital signatures.
 
"It’s about using technology," said Raymaekers. "But it’s also very important what do you put into the ledger?"
 
Not waiting for blockchain
 
Notably, Raymaekers repeatedly emphasized that he believes Swift is already solving its customers’ problems using more traditional, existing technology.
 
As far back as 2003, Swift had established a working group consisting of several banks that have since taken a leadership role in blockchain to create a decentralized model for bank-to-bank information exchange.
 
While that early work appears to have been wrapped up in Swift’s Intraday liquidity project to integrate a liquidity dashboard into Swift member databases, the work to improve nostro account management has continued.
 
In a 2012 report, Raymaekers co-authored he found that the top 80 payments banks in Swift’s membership had already reduced the number of nostro accounts in Europe and the Americas by 16% and 11% respectively, with accounts in Asia Pacific increasing by 4%, between 2005 and 2011.
 
Those changes resulting from concerns following the financial collapse of 2007 were part of what Swift described as "Correspondent Banking 3.0."
 
Now, the current blockchain push is part of an even larger effort within Swift called the Global Payments Innovation initiative, or GPI.
 
Global Payment Innovation
 
Stepping back further, the GPI itself is part of a series of sweeping changes by Swift designed to simplify cross-border payments around the world.
 
In its first version, expected to roll out in early 2017 with about 100 banks participating, Swift is working to simplify the process of international payment instructions, the standardized messages for which Swift is perhaps best-known.
 
According to Raymaekers, that objective has already been largely achieved with traditional technology that the banks can more easily incorporate.
 
But that’s only half the GPI’s objectives.
 
The initiative also aims to simplify reconciliation of nostro accounts and more, something Raymaekers believes might prove to be an ideal use case for distributed ledger technology, and something he hopes this most recent proof-of-concept will help prove.
 
Raymaekers concluded:
 
"A big problem is the reconciliation between banks on these supporting databases. That’s where within the GPI initiative, we are going to explore DLT to synchronize those databases."
 
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Article From May ...

 

 

https://www.bloomberg.com/news/.../inside-the-secret-meeting-where-wall-street-teste

Inside the Secret Meeting Where Wall Street Tested Digital Cash

by 

Matthew Leising 

@mattleisingMore stories by Matthew Leising

‎May‎ ‎2‎, ‎2016‎ ‎9‎:‎00‎ ‎AM

  • Fiserv created digital dollars to show gathered executives
  • April meeting was sponsored by blockchain startup Chain

On a recent Monday in April, more than 100 executives from some of the world’s largest financial institutions gathered for a private meeting at the Times Square office of Nasdaq Inc. They weren’t there to just talk about blockchain, the new technology some predict will transform finance, but to build and experiment with the software.

By the end of the day, they had seen something revolutionary: U.S. dollars transformed into pure digital assets, able to be used to execute and settle a trade instantly. That’s the promise of a blockchain, where the cumbersome and error-prone system that takes days to move money across town or around the world is replaced with almost instant certainty. The event was created by Chain, one of many startups trying to rewire the financial industry, with representatives from Nasdaq, Citigroup Inc., Visa Inc., Fidelity, Fiserv Inc., Pfizer Inc. and others in the room.

The event -- announced in a statement this Monday -- marked a key moment in the evolution of blockchain, notable both for what was achieved, as well as how many firms were involved. The technology’s potential has captivated Wall Street executives because it offers a way to free up billions of dollars by speeding transactions that currently can take days, tying up capital. But a huge piece of that puzzle is transforming cash into a digital form. And while some firms have conducted experiments, the Chain event showed a large number of them are now looking jointly at a potential solution.

“We created a digital dollar” to show the group at Nasdaq an instant debit and credit on a blockchain, said Marc West, chief technology officer at Fiserv, a transaction and payments company with more than 13,000 clients across the financial industry. “This is the first time the money has moved.”

Quietly Building

Chain is already known in some Wall Street circles for its project to help Nasdaq shift trading of non-public company shares onto a blockchain. But for the most part, it has kept relatively quiet compared with other fintech ventures.

The San Francisco-based company also used the April 11 meeting to introduce its customers and investors to Chain Open Standard, an open-source blockchain platform that the venture has been designing for more than a year, said Adam Ludwin, the company’s chief executive officer. What Chain has done is engineer the complicated elements needed for a blockchain to work, so that its customers can build custom solutions on top of that to solve business problems, he said.

“We’ve been quietly building with a whole bunch of folks for a few years,” he said. “Blockchains are networks, so we think collaboration is important, but what’s even more important than collaboration at the beginning is getting the model right.” The event was kept secret so executives could freely share nascent ideas and take risks. “The more press, the less quality of the dialogue and problem-solving,” he said.

The most common blockchain is the one supporting the digital currency bitcoin, which has been active since 2009. Financial firms have been reluctant to embrace bitcoin, however, as its anonymous users could entangle banks in violations of anti-money-laundering and know-your-customer regulations. Digital U.S. dollars, or any other fiat currency, on the other hand, doesn’t pose those risks.

‘Mainframe Era’

Nasdaq and Citigroup partnered to explore how they can work together, said Brad Peterson, the exchange-owner’s chief information officer. He said blockchain also could be used for reference data -- how specific stocks or bonds are identified across all markets, for example.

Wall Street was one of the earliest beneficiaries of computers replacing office systems. Now 30 years later, those legacy systems can be a hindrance to further technological evolution, he said.

“That’s the great opportunity -- how to unlock that ability to work your way out from under the mainframe era,” he said.

While cash in a bank account moves electronically all the time today, there’s a distinction between that system and what it means to say money is digital. Electronic payments are really just messages that cash needs to move from one account to another, and this reconciliation is what adds time to the payments process. For customers, moving money between accounts can take days as banks wait for confirmations. Digital dollars, however, are pre-loaded into a system like a blockchain. From there, they can be swapped immediately for an asset.

“Instead of a record or message being moved, it’s the actual asset,” Ludwin said. “The payment and the settlement become the same thing.”

Ian Lee, head of Citigroup’s global lab network and acceleration fund, said one of the first areas of research Citigroup undertook when it began studying blockchain was how digital cash could be used. He was impressed with the variety of clients Chain brought together, as collaboration on Wall Street is rare. A lot of companies are facing the same problems with how to make blockchain a reality for their business, he said.

“While blockchain technology has a lot of potential, it will need to integrate with and co-exist with the financial system that exists today,” he said.

Ludwin said blockchain has been validated on Wall Street, and now it’s time to focus on creating solutions.

“Putting it all together is no small amount of work, nor is re-engineering business processes within large organizations,” he said. “This isn’t ‘financial engineering.’ This is software engineering that is going to reshape financial services.”

 

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WHAT IS A BLOCKCHAIN?

A blockchain, also known as a distributed ledger, is a shared, immutable database designed specifically for securing and transferring financial assets. Unlike a traditional database that manages balances on behalf of users, the assets on a blockchain are controlled directly by the owners of those assets through the use of secure, cryptographic keys.
By analogy, a cryptographic private key is similar to a physical key that secures a safety deposit box. And a blockchain is like a virtual network of these safety deposit boxes. When an entity wants to spend their money, they take their key, open their box, select the amount they wish to spend, and deliver those funds into the box of the recipient. The recipient is now in control of those funds since they hold the key to their box.
Why does this matter? Because when asset owners remain in control of their assets, they can move them directly to counterparties over a network without depending on intermediaries.
This new, more secure model of financial infrastructure reduces the costs and risks of asset movement to market participants in industries as varied as payments, banking, capital markets, insurance, trade finance, and supply chains. It also enables the creation of new types of financial products and services that were never before possible.
Chain’s technology is specifically designed for moving financial assets in permissioned, high-scale environments that require enterprise-grade security and privacy. Chain powers not one, but several, blockchain networks deployed and operated by our partners that serve different markets and use cases.

https://chain.com/faq/

 

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6 hours ago, DinarThug said:

 

WHAT IS A BLOCKCHAIN?

A blockchain, also known as a distributed ledger, is a shared, immutable database designed specifically for securing and transferring financial assets. Unlike a traditional database that manages balances on behalf of users, the assets on a blockchain are controlled directly by the owners of those assets through the use of secure, cryptographic keys.
By analogy, a cryptographic private key is similar to a physical key that secures a safety deposit box. And a blockchain is like a virtual network of these safety deposit boxes. When an entity wants to spend their money, they take their key, open their box, select the amount they wish to spend, and deliver those funds into the box of the recipient. The recipient is now in control of those funds since they hold the key to their box.
Why does this matter? Because when asset owners remain in control of their assets, they can move them directly to counterparties over a network without depending on intermediaries.
This new, more secure model of financial infrastructure reduces the costs and risks of asset movement to market participants in industries as varied as payments, banking, capital markets, insurance, trade finance, and supply chains. It also enables the creation of new types of financial products and services that were never before possible.
Chain’s technology is specifically designed for moving financial assets in permissioned, high-scale environments that require enterprise-grade security and privacy. Chain powers not one, but several, blockchain networks deployed and operated by our partners that serve different markets and use cases.

https://chain.com/faq/

 

Holy crap... THIS is exactly why bitcoin is struggling.

Even when these technogeeks try to simplify it, they still can't put it in terms that people can understand!

I'm thinking about doing a special VIP chat to cover the basics of bitcoin in language that people can actually understand... VIPs, stay tuned for that announcement. It will take some preparation on my part, so I'll try to get it scheduled for late next week or the following week.

:twothumbs: 

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1 hour ago, Freedomwish said:

In today's world in regards to security and hacking all over the place, makes me yet wonder how secure and solid would this new technology be?  :confused2:

That's an excellent question, of course!

The blockchain program is extremely solid. The security issues come in when you add the human element.

There are basic "best practices" we can follow to eliminate 99.9% of any technology risks. :twothumbs: 

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21 minutes ago, Adam Montana said:

That's an excellent question, of course!

The blockchain program is extremely solid. The security issues come in when you add the human element.

There are basic "best practices" we can follow to eliminate 99.9% of any technology risks. :twothumbs: 

Ok cool, I will definitely be studying up on this to further educate myself especially if this would benefit us Post RV - another whiskey shot in your name at happy hour tonight, thanks Adam! :cheesehead:

Edited by Freedomwish
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7 hours ago, Freedomwish said:

In today's world in regards to security and hacking all over the place, makes me yet wonder how secure and solid would this new technology be?  :confused2:

No Worries Dude - I'm Sure It's Totally Secure ! :o 

Image result for funny unsafe gifs

:D  :D  :D 

 

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