Bitcoin: Why major banks misunderstood the block chain

Bitcoin evangelist, software developer and journalist Chris DeRose looks back on the year 2015 and explains the current state of Blockchain applications and is already looking forward to what 2016 will bring.

To get an overview of the current state of private blockchains, there is no better way to do this than through this year’s Blockchain-Panel conference.

In front of a group of renowned financial experts, “Bitcoin secret experts” and the audience agreed

Bitcoin secret is the future, even if some lacked knowledge about the basic idea behind Blockchain technology. With every new year a new audience appears, which wants to solve our everyday problems with the Bitcoin secret. As in every year, the boring “notarial certification via Blockchain” was made a big issue.

If one reads through the marketing brochures of private blockchain providers, one quickly gets the impression that they have discovered a technology that handles complex calculations in such a short time that the entire current financial system would succumb.

Certifications have never been a feature of the blockchain and have even been seen as one of the biggest bugs. If you ask a Bitcoin developer about the biggest problems of the blockchain, he will probably answer with “fungibility” as the biggest weakness.

Even though many headlines say that the big banks support and test the applications of blockchain technology, it seems that the newcomers do exactly what newcomers usually do: they start their own blockchain and start selling their own tokens.

What is unique among the new market participants, however, is that the tokens are seen as “bad” and the shares in the circulating blockchains as “good”. The difference between tokens and shares in the blockchain remains a daring one, but apart from the nuances, everyone wants to get support for their investment.

The biggest winners in 2015 are and remain those who have secured the largest investment sums.

Blockchain cryptosoft Propaganda

Computerised transactions, certifications and checksums are a mature industry whose efficiency has never been hampered by anything other than cryptosoft regulation. These cryptosoft regulations are usually efficient and reduce the risks in the financial sector. The software in the sector works as precisely as the regulatory framework allows. Some may even think that a traditional bank transfer takes so long because the servers can’t work faster.

From the initial hype to today’s private blockchins, the blockchain was sold as “the technology behind Bitcoin”. Many of the newcomers in 2015 have taken the propaganda to heart while ignoring the most important part: Reducing the risks of a transaction between untrusted participants.

Whether you think Bitcoin is a fad or not, it seems that this fundamental segment has not been questioned by any of the 2015 newcomers.

Towards the end of 2015, it seems, the argumentation is gradually beginning to lift.

Remarkably, the established payment networks are beginning to understand the true purpose behind the blockchain.

American Express recently conducted a large financing round with the innovative regulatory arbitrage company Abra. Shortly thereafter, Visa presented its own (well-considered) Bitcoin Proof of Concept application.

What does the future hold?
So what can we expect for the blockchain in 2016?

Only a few sectors are as active as the blockchain sector and thus the success is already obvious. The successful companies already include the older startups BitPagos and Backpage.

Among the start-ups that seem to have most efficiently implemented the blockchain technology are Nitrogen Sports, a platform for sports betting online games and the addictive games platform BitKong.

Applications that successfully implement and use blockchain technology will be successful. Not because people want to use the blockchain, but because they have to. There are many more “Gamechanger applications” waiting on the horizon that may sound very ambitious with today’s standards, but Gamechangers are the startups that make up the FinTech sector.

Certainly the private blockchains also have a future in 2016, but it will be difficult to find a market for authentications that is not yet covered by Archieve.org or Google Docs.