Coin News

With assets lacking legal title estimated to total $20 trillion around the globe, the pilot, using the technology behind Bitcoin, aims to ultimately help unlock that capital.

You may have noticed that Wall Street has gotten pretty excited about blockchain. 

Blockchain is the technology behind bitcoin. Wall Street wants to use blockchain to simplify the way it processes transactions. 

It promises to improve security, lower costs and increase the speed of transaction settlement. You can read a fuller explanation here. 

Goldman Sachs says the technology "has the potential to redefine transactions" and can change "everything." A bunch of financial firms have signed on with R3, an industry-wide body trying to bring blockchain to finance. Autonomous Research has called the technology a "game changer."

According to a big report by Huw van Steenis over at Morgan Stanley, some of that excitement is justified. Blockchain, also known as distributed ledger technology, is an interesting development, and could help banks reduce costs.

But some of the current buzz is a little over the top, according to Morgan Stanley, not least because widespread use of the technology is some way away. 

"There are a few misconceptions that may overstate quite how disruptive distributed ledgers could be," the report said.

For example, the widespread rollout of this kind of technology is years away. Here is Morgan Stanley:

We expect the financial institutions and their customers will adopt blockchain technologies asset class by asset class for validated proof of concepts (POC) efforts over the next 2-5 years in an iterative process that will likely last decades.

Regulation means that new blockchain startups are unlikely to usurp banks, meanwhile. Here is MS:

Not one bank nor policymaker that we have met with on blockchain gives even a second thought to an unpermissioned public network. KYC, AML and other considerations means it has to be a permissioned network. This reduces the risk that a new start-up will be able to disintermediate entire value chains. How many tech companies want to vertically integrate into a regulated financial institution? It seems more likely that they will want to retain their tech-oriented multiple as a supplier of software and consultants to the financial services industry rather than as a regulated financial.

In other words, distributed ledgers will need to plug in to existing tech inside the big banks. Startups aren't going to disrupt the establishment, and financial firms aren't going to completely reinvent their existing tech, or take a "massive punt," as Morgan Stanley puts it, on blockchain tech until it is proven. 

Let's be clear, whenever we meet C-suite of financial institutions, we see the hurdles and limitation of blockchain technology.That's not to say they are insurmountable – but to take a view of quite how disruptive blockchain technology could be and how long it could take to be realized, you need to understand the hurdles and roadblocks.This is not to say any of the below are not solvable, but non is trivial and suggests to us we are not talking 2017 or 2018 impact on bank, custodian or market infrastructure profits, in our view. Rather materially beyond this.

Here are the challenges facing blockchain:

Join the conversation about this story »

NOW WATCH: Broadway’s biggest hit ‘Hamilton’ is making over $2 million a month — here’s why the producer thinks it could be making a lot more

The price of bitcoin passed $448 for the first time in two months today on the CoinDesk USD Bitcoin Price Index (BPI).

A blockchain project being developed by MIT researchers gained new attention this week following criticism of its alleged design elements.

Matt Luongo, the founder of Fold, and his team are known for creating an app that lets you spend bitcoins at large retailers such as...

The post Fold Relaunches Card for Cash: Trade Gift Cards for Bitcoin appeared first on Bitcoin Magazine.

Editor’s Note: This Is Part 2 of the CCN series, “Peace & Stability Through The Public Ledger.”  For Part 1, click here. In the first part of this series, we examined the ways in which changing political postures of global citizens, and the history of IBM, helps paint a picture of the world in which […]

The post Peace & Stability Through The Blockchain: Payments & Finance appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

Having been in development for more than two years, what promises to be the first proper decentralized Bitcoin exchange is set to officially...

The post Decentralized, Peer-To-Peer Bitcoin Exchange Bitsquare to Launch Next Week appeared first on Bitcoin Magazine.

Segregated Witness might be the most significant improvement to the Bitcoin protocol to date. The innovation is set to fix transaction...

The post The Segregated Witness Timeline: From Idea to Adoption in Six Steps appeared first on Bitcoin Magazine.

The draft law proposed by the Ministry of Finance in Russia to ban the circulation of cryptocurrencies like bitcoin in the Russian Federation is delayed in its entry to the State Duma. A proposal by the Finance Ministry that is seeking to officially ban bitcoin and cryptocurrencies in Russia has hit a delay. The draft […]

The post Russian Finance Ministry’s Bitcoin Ban Bill Delayed, Due to Criticism appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

Bitcoin price has made gains over the past few days to set a new 3-month high of $443.69 today. The Bitstamp Price Index struck $440 at 16:00 yesterday, April 20 and has remained to hover over the figure ever since. At the time of publishing, the price of bitcoin was trading at $444. The figure […]

The post Newsflash: Bitcoin Price Touches $444, a 100-day High appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

You can probably still find clumps of my hair inside dozens of companies where I've launched products and services. Why is it always such a yuuuge struggle? Big companies have lots of valid – and lame - reasons not to innovate. By far the most insidious is: they secretly know they don’t have to. Not only does data show big companies aren't being “disrupted”, but they're running away with all its juicy perks. This is the story of why innovations like Bitcoin and Netflix aren't ‘changing the world’ but instead, pulling all-nighters for The Man.

Ed Moy, a former U.S. Mint Director, has recommended cryptocurrency like bitcoin as one of three useful ways to diversify your personal portfolio, according to Newsmax’s finance section. As long as the Internet exists, digital currencies such as bitcoin will have value, and they are beyond the reach of government and banks at present. In addition […]

The post Former U.S. Mint Director: Cryptocurrency Offers Secure Way To Diversify Personal Savings appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

Kraken, one of the largest bitcoin exchanges in the world has announced the appointment of Edward Stadum, a lawyer and fintech advisor with over five decades of legal experience and insight into international law. Global Bitcoin exchange Kraken has hired Edward M. Stadum as its General Counsel. Stadum will provide opinion and specialist advice for […]

The post Bitcoin Exchange Kraken Hires Financial Law Veteran as General Counsel appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

Palo Alto Networks has discovered a unique malware family that can mine bitcoins via the victim’s CPUs and GPUs. The malware, called PWOBot, is completely written in Python and compiled via PyInstaller, generating a Microsoft Windows executable, according to a Palo Alto Networks posting. The malware has affected European organizations, mainly in Poland. A Polish […]

The post New Malware Mines Bitcoin via Victims’ CPUs and GPUs appeared first on CCN: Financial Bitcoin & Cryptocurrency News.