Bitcoin is not beloved in the world of finance. More than once it was reported by crypto skeptics that its future is doomed. But at the same time, they are simultaneously studying blockchain solutions for their financial structures. Why does it happen? The fact is that the Bitcoin network, as the most popular network among analogs, has taken on a considerable share of international payments. Thereby redirecting part of the transaction from the official (banking) system to a semi-official, and practically unregulated environment. Of course, the regulators have questioned whether there will be sponsorship of terrorism or other criminal acts. In other matters, the heads of the Central Banks are using this subject to blacken the popular decentralized network.
After all, the blockchain is known as a distributed registry system, and there is no intermediary in it. That is, if you make a payment, it will be received by your friend, or, for example, relative within minutes. There will be no bank between you, no supervisory authority; the tax system will not know anything. But technically, all participants in this system will be aware of this payment. In other words, there is no single server through which this payment will pass; each participant is the server of the entire system.
On top of this, the progress of the Lightning Network’s blockchain solution is no longer mentioned. The principle of peer-to-peer was realized more than ever when the payment channel was activated. If you want to send payment quickly and uncompromisingly, then make a pledge for it. Something that resembles the use of Torrent – “seed before downloading.”
The war of financial worlds
Blockchain has generally become so popular and sometimes even habitual that central banks and large financial regulators have declared it an unspoken war. It can be seen with the naked eye that a serious precedent for losing control over the finances of the whole world has been created. At the same time, it is clear that there are not so many transactions in the blockchain network and their volumes are incomparable, for example, with the SWIFT system. Blockchain has already “shaken” the usual bureaucratic vertical structure of the financial system. It has created conditions for an independent horizontal order based on the “log-rolling” principle.
One wonders, why large commercial banks are so opposed to Bitcoin while creating their own blockchains and cryptocurrencies. The fact is that technology is so flexible and protected that it allows you to optimize the costs of internal processes. It is known that some blockchains are not quite ready for the implementation of smart contracts – they are more transaction-oriented. That’s because some commercial banks find it easier to create their own closed blockchain system, especially for their internal tasks.
JP Morgan keeps up with the times
One of the first who has made such a “knight’s move” is the large US bank – JP Morgan. As you know, in 2016 the bank has announced that it was going to work on its own distributed registry network called Quorum. As the advanced developers of the bank said, their network would work with Ethereum. At the same time, they noted that the development will still be centralized since some actions will be carried out with the permission of the bank’s top managers.
Simply put, why fight the new system, which is already firmly established, when it is better to create your own alternative, killing two birds with one stone – a bank cryptocurrency is created, and the blockchain optimizes the work of the bank structures. Thus, the autonomy of the bank is established. In addition, another source of bank financing through crowdfunding with the help of ICO is being created. We can only imagine how successful such kind of ICO can be if announced by JP Morgan.
What are the plans of Japanese banks
The Japanese group – Mitsubishi UFJ Financial Group (MUFG) has announced its readiness to launch its blockchain-based payment system in 2020. According to company representatives, their system will be processing up to 10 million transactions per second. In addition, it is known that current payments are time-consuming and costly. Few people want to pay fees for processing payment through another bank. In this case, the cooperation of the Japanese group of banks on the blockchain basis creates good conditions for comfortable and fast transactions.