This article in Banking Technology delivers a relatively exhaustive list of arguments suggesting Blockchains will not fix payments. This article provides a few quotes from government sponsored research that challenges the legitimacy of Blockchain unless it is integrated to existing solutions and then offers this perspective on smart contracts and how the Blockchain is intrinsically linked to Bitcoin:
“The reality of blockchain supports the findings of the US Federal Reserve and the Bank of Canada. In one speech on DLT, the Fed says there are concerns about smart contracts:
‘Although the idea of automating certain aspects of contracts is not new, and banks do some of this today, the potential introduction of smart contracts does raise several issues for consideration. For example, what is the legal status of a smart contract, which is written in code? Would consumers and businesses rely on smart contracts to perform certain services traditionally done by their banks or other intermediaries? Could the widespread automated interaction of multiple counterparties lead to any unwanted dynamics for financial markets? These and other considerations will be important factors in determining the extent of the application of smart contracts.’
The problem, according to CEO of Kalypton, Lars Davies, is that many people are trying to separate Bitcoin from blockchain. Bitcoin is often perceived as being bad, while Blockchain is perceived as good.
‘Bitcoin and blockchain are intrinsically linked, they are symbiotic,” says Davies. “People assume that it is a valid solution, but there is very little analysis. What problem does it solve? They are often spoken about in separate ways and there is an assumption that blockchain is useful.’ ”
The argument that blockchain is tightly coupled to Bitcoin has been made by Mercator for 2 years now and we stated that whomever succeeds in separating the two should win a Nobel prize. While Ethereum may be getting closer with its proof of stake; as of today we’re still waiting.
The second point made here, trying to identify what problem a Blockchain solves is answered in a very convincing manner by Adam Ludwin in Payments Journal here and in his blog to Jamie Dimon here, where he (correctly in my opinion) described the sole benefit of a decentralized system as resistance to censorship.
The article then gets a tad lost as it continues to combine issues associated with both bitcoin and blockchain. It discusses the law suit between R3 and Ripple, describes the irrational hype that surrounds blockchain, evaluates crypto value as compared to the gold standard, market fluctuations and many additional points.
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group
Read the full story here