• miridius@lemmy.world
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    4 months ago

    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
    • abruptly8951@lemmy.world
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      4 months ago

      Relative point to point

      • which Blockchain are we talking here? How does it compare to the current banking infrastructure?
      • again, which one? How does it compare to the current pricing?
      • escrow is a thing, someone can build up a PayPal equivalent on top of a Blockchain, the list goes on
      • the current system doesn’t do great here, some Blockchains makes it way more traceable, in fact
      • skill issue, but also solvable with a PayPal equivalent
      • not a fact, what does this even mean?
      • does it?

      You could say the Linux kernel is an astronomically terrible idea because it doesn’t do anything…but it is just the platform, the good comes from what people build on top of it that add all these quality of life features you miss

      Buy ydy

    • drathvedro@lemm.ee
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      4 months ago

      payments/transfers would be both much slower AND much more expensive than via a bank

      Not necessarily. You could have a federated system, where only big players like banks participate in larger blockchain, like banks already do with forex and wire transfers and pay ridiculous fees to clearing agencies, and clear out local transfers locally, possibly inside their own smaller and much faster blockchain.

    • Fuzzypyro@lemmy.world
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      4 months ago

      Just to elaborate here. You are describing one implementation of a blockchain that provides a cryptocurrency. Blockchain is literally just another form of a database. It’s just that it can contain traits that would allow the database to be shared and distributed unlike typical databases. Currently there are some companies that are utilizing blockchain for their inventory systems. They aren’t using any more energy than they would with a typical system. They are just doing it to keep an unchanging record of past transactions which helps with fraud and loss prevention.

      P.S. Money laundering using a system that is publicly distributed and has every transaction involving usd paired with an ID, social security number and enough pictures of your face to make a 3D model is genuinely idiotic.

    • I_Has_A_Hat@lemmy.world
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      4 months ago

      You seem to have conflated blockchain technology with cryptocurrency. Most cryptocurrencies use blockchain technology, but that’s not it’s only use case. Literally every problem you have listed relates to crypto and not blockchain itself. Blockchain is just a ledger of transactions. A private company using it to say, keep track of their inventory, or track their payments, or use it for document control, can implement it however they want.

      • miridius@lemmy.world
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        4 months ago

        Ok so firstly you’re not the OP I was replying to, so neither of us know for certain whether they were talking about replacing the banking system with a decentralised currency vs keeping the existing centralised private banks and just having them use a blockchain as their database. I assumed the former because of their wording (“replace the banking system”), and because the latter offers no advantages that I know of.

        Secondly if you think a blockchain would offer some advantages over other more efficient write only databases, I’d be interested to know what those are, because to me if you’re not running a decentralised system then you’re only getting the downsides of blockchain (such as it being single threaded, slow, and space inefficient) without any of the upsides.

        For some background, I’m well aware of how both blockchains and crypto work, having been obsessed with them for a little while in 5 or 6 years ago like many of us were before becoming disillusioned. I’ve also got professional experience as a developer on both immutable databases and banking ledgers.