This article in CNBC highlights the odd fact that Cathy Bessant, the head of BoA’s research arm is a blockchain skeptic even though BoA has the most blockchain patents. Well I’m with Cathy #BlockchainSkeptic.
“Bessant is wading into the debate about the blockchain, whose proponents have claimed will be as significant as the internet. A blockchain is an encrypted database that runs on multiple computers, potentially cutting out the need for centralized authorities like banks or governments to settle transactions between parties.
Economist Nouriel Roubini has called it “the most overhyped ” technology in history. Others have said that blockchain merely needs time to evolve and could eventually upend entire industries from finance to cloud computing and health care.
As the mania over cryptocurrencies died down in the past year amid a bear market, attention and dollars have funneled into blockchain start-ups. Venture capital firms poured $5.4 billion into blockchain start-ups last year, compared with $1.5 billion in 2017, according to Autonomous Research.
‘Show me the use case’
The technology got a boost from rival J.P. Morgan Chase, which revealed last month that it created the first cryptocurrency backed by a major U.S. bank to facilitate blockchain-related payments.
But Bessant, who oversees 95,000 technology workers and was named the most powerful woman in banking last year, is a pragmatist. She started out at Bank of America in 1982 as a commercial banker, eventually rising to a series of top roles, including head of corporate banking and chief marketing officer. She has run the bank’s global technology and operations division since 2010.
Most of what she sees doesn’t make sense for finance or significantly improve upon existing methods. She said it’s a technology in search of a use case, rather than something designed specifically to solve existing problems.
“I haven’t seen one [use case] that even scales beyond an individual or a small set of transactions,” Bessant said. “All of the big tech companies will come and say ‘blockchain, blockchain, blockchain.’ I say, ‘Show me the use case. You bring me the use case and I’ll try it’.”
‘I want it to work,’ she added. ‘Spiritually, I want it to make us better, faster, cheaper, more transparent, more, you know, all of those things.’ ”
Are you a #BlockchainSkeptic?
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group