"Barron's": block chain technology will change how the financial sector | Barron | block chain | Finance

  It is also possible to subvert the future of financial markets。
  In the first half of this year's hottest investment is not buying ,, or even stock。
Perhaps the fact that the broker would not recommend it, even not been recognized by the US Securities and Exchange Commission (SEC) of。 Nevertheless, encryption currency – which Bitcoin most famous – was a very bright。   With prices soaring above $ 2,500 five years ago to buy Bitcoin for $ 500 or $ 500 less than the price investors are now a millionaire。
Bad person just because a wrong password're missing a lot of wealth, like putting a box of money at train station。 People accused of price increases this year, nearly twice the Bitcoin fueling the drug trade, in favor of hackers wreak havoc corporate and government networks。 Sometimes bits currency prices fluctuate within 20% of one day, and is often the reason to an idea or from a rumor。   It is easy to Bitcoin dismissed as eccentric or even dangerous trend。
But do not do it。
  Even if Bitcoin eventually collapse or fall, the basic technology "block chain" has the potential to upend the future of financial markets。   Block chain is a computer network at the same time recording and verification of digital books, much like without their consent a shared Excel file can not be modified。 Importantly, block chain technology makes the transaction was not trusted intermediary class of the clearing house can be。   Some companies are already using the single block chain technology to send payment transaction settlement and redesign。 By standardizing the process of recording a variety of financial ,, financial giants like can save billions of dollars in costs, these companies are facing increasing profitability and increase pressure to cut costs。 And block chain technology also demonstrated considerable prospects from medical records to the insurance, energy, trade and other fields。 Even traditionally conservative financial companies are in a world changed the tone of talk block chain technology。
  Fidelity Investments Chairman and CEO Johnson (AbbyJohnson) 5 Yuefen in a block chain technology related to the General Assembly on said the technology is not just a more efficient securities settlement, he will fundamentally change the market structure, and may even be change the structure of the Internet itself。 Johnson has a unique point of view, even he is involved in Bitcoin "mining"。
  Bitcoin currency is not just able to trade on the Internet。 Different from the traditional currency supply control central bank, about 10 minutes new bit credits generated by a global computer network every。
The network itself is also called "bit money" (bitcoin), maintaining real-time updates of Bitcoin transactions。
  The possibility of the computer connected to the Bitcoin market, in theory, anyone can become bitcoin mining "Miner", but dug a large number of small Bitcoin。
Today mining companies to China-based, they use specialized equipment to quickly perform complex mathematical tasks to verify the transaction。   No physical mark bit credits – credits bit holder is able to obtain money or code "keys"。 Parties entered secret key enables the system to verify the transaction and recorded in one block。 Only 21 million the total amount of money bit (16.4 million has been dug up), so there is no central authority can devalue。
  Achieve Bitcoin digital currency is not the first idea。 In the Bitcoin was born 10 years ago at least, some of which have liberal ideas of science and technology to invent a dream believers will be able to deal directly with each other, central banks and regulatory authorities from interfering digital currency。 But initial efforts did not achieve much success。
  Height of the financial crisis in 2008 when, under the pseudonym Satoshi (SatoshiNakamoto) of one or more programmers to share ideas in a Bitcoin forum。 Bitcoin key innovation is to allow people without relying on trusted intermediaries and trading with each other, which was after more and more people lose confidence in the institutions should protect their money is a strong selling point。
  For some people, just hit the jackpot dug Bitcoin。 Bitcoin early core developer Andresen (GavinAndresen), told the publication, "I feel suddenly discovered the true significance of a great idea, but is also aware of things like Bitcoin to prove that they live up to trust takes years time. "。 Andresen is a Massachusetts software developer, is rapidly becoming one of the most prominent figures Bitcoin。
On the eve of 2011, Nakamoto retired Andresen was appointed chief Bitcoin developer。
  Bitcoin outset controversies and plagued by fraud。
People do not want to be connected network computer with bitcoin Bitcoin mining is often bought and traded Bitcoin trading platform, trading platforms and these are easily destroyed。 For example, named Mt.Gox is one of the largest trading platform had "lost" a billion dollars worth at the time and now worth $ 2.2 billion 850,000 bitcoins (later part of the back), filed for bankruptcy in 2014。   Criminals quickly recognized the potential of Bitcoin。
By a large number of drug trade Bitcoin push prompted the dark net Silk Road (Silk Road) once prosperous。
Hackers and blackmailer bits required to pay ransom with credits。   All of these are likely to destroy Bitcoin, especially if the US government regulatory intervention。 But Bitcoin itself proves toughness of hacking and other fraud, has been abandoned to its core users。
Andresen says, "Most of us expect Bitcoin will be a long-term project rather than a means to get rich quickly。 "In order to arouse interest in the early Andresen actually give you distribute a number of bitcoins。
This situation will not happen again。
In 2010 an asking price of eight cents Bitcoin。 Last week Bitcoin transaction price of $ 2550, this year has risen 170%。
Clearly investors are a bit speculative money, a lot of people it as much as gold as an asset, Real Economy。
  But Bitcoin but also because more and more useful and more people are accepted and up。 Bitcoin transaction processing company BitPayCEO Pell (StephenPair) that can handle 5-10 transactions in 2011 when he co-founded the company very happy every day, like today, the amount of processing an average of 8,000 transactions。
Expedia and accepting bitcoins, people sometimes get bitcoins to buy a house and car。 However, in general, grocery stores and retail outlets is not accepting Bitcoin, perhaps never accept。   Director of the Research Center of the Boston Fed consumer payment ScottSchuh said that in the United States about% -% of adults (approximately 1.2 to 1.9 million) used Bitcoin, Bitcoin is not found acceptance rates increase sharply。 Bitcoin to accept a higher degree of central banks in some countries the devaluation of the currency abroad。 In fact BitPay payment of staff salaries with bitcoins in Argentina。   Recently, Bitcoin suffered growing pains。
Bitcoin network is slow, difficult to handle a large number of people trying to deal, and I hope that the user had to pay to be treated separately pay。 The research reported a Bitcoin network can only handle 5-8 blocks chain transactions per second, it is able to process a million transactions per credit card network。 If not Bitcoin large code base changes (Bitcoin fans of this great controversy), Bitcoin will not be due to insufficient liquidity for daily purchase, which will mainly be a store of value – gold bars rather than similar credit card。   As for the US government, and even the nature of Bitcoin are undetermined。
The IRS will Bitcoin as an asset, commodity Futures Trading Commission said Bitcoin is a commodity, the Ministry of Finance regulators called virtual currency。
Federal Reserve Chairman Xi Yelun said the Fed competence to regulate bitcoin, but the central bank to encourage people to study。
Articles about how the new government proposed deal with encryption currency, SEC has not responded。
  For investors, buying Bitcoin is a gamble。
In addition to the purchase Bitcoin Bitcoin itself or investment trusts BitcoinInvestmentTrust (GBTC) share, investors have little choice。
BitcoinInvestmentTrust is a tracking bitcoin prices of OTC securities。 SEC rejected the prosecution Zuckerberg famous Winkler Voss brothers founded application bitcoin exchange-traded fund WinklevossBitcoinTrust, but its decision is being reviewed。   At the same time, entrepreneurs launched imitate structure but different bitcoin digital currency of other。
The most popular is a rising star named Ethernet encryption currency currency, its value from about $ 10 at the beginning of the year to its current $ 300 market value of about $ 27 billion, compared with Bitcoin market capitalization of $ 42 billion。 And Bitcoin is similar to the trend of currency fluctuations Ethernet is also a great month "flash collapse," or even, low price was ten cents。
  However, far from being just an Ethernet currency currency。 Ethernet coin operated block chain networks allow people to embed complex information, including the terms of the contract into computer code and provides "smart contract" how to perform。   PwC is responsible for the financial block chain projects McNamara (GrainneMcNamara) at a meeting held in November last year, the SEC said that thrive intelligent contracts, for example, I can make out a check postscript " I will finance your project $ 5,000, but only if you needed to raise to launch a new product of $ 5 million, otherwise the money will be returned to me. "。
  Too big to use currency platform, JP Morgan Chase, and dozens of other companies set up corporate coins Ethernet Alliance (EnterpriseEthereumAlliance) to explore its potential。   Ethernet currency Bitcoin success and gave others confidence to launch its own digital currency, and some with little commitment to raise tens of millions of dollars。
These new digital currency founder usually say that they will build a product associated with the money, give money holders preferential treatment。 But this is no guarantee that the product can appear, the situation began to seem fanatical, MIT professor Cartagena Chiellini (ChristianCatalini) warned, we are moving towards digital currency foam。
  Kata Lini said in an interview, in view of people's enthusiasm and level of funds raised and the amount of foam is almost inevitable。   foam?Drugs Market?Malicious hackers?Traditional banks may be interested in how digital currency?  In the post-Napster world and Uber appeared that Wall Street no longer ignore the legitimacy of the use of temporary or unclear Technology。
This does not mean the US banks have begun trading Bitcoin。
If any, is only a few banks will be exposed bits coins, in part because they can not be effectively comply with "know your customer" laws。
  Financial institutions seem to test Bitcoin most interested Fidelity Investments。 The company allows employees to use bitcoins in the cafeteria, and invited experts to Bitcoin its club-bit + BlocksClub lecture。
Fidelity Charitable (FidelityCharitable) helps customers turn their bitcoins charitable donations have tax benefits。
  Fidelity Investments will soon allow customers to hold Bitcoin view their account balance by Fidelity company called Coinbase, but the actual transaction shall leave the Fidelity website。   Nevertheless, few people expected Bitcoin will soon have a place in the traditional financial system。
However, entrepreneurs are taking advantage of this fundamental change in the financial industry technology。
  2014, start-up companies have no direct connection with the use of bitcoin block chain technology design of financial products。
They sell to the bank executives, called block chain technology will accelerate a number of back office operations – such as transaction settlement or cross-border payments and reduce the costs of these activities。
And the user does not have permission to enter the Bitcoin network can be different block chain also closed to the public, to create a only after explicit permission to access a user's system, so that it can secure enough to operate in strict supervision of the financial world。
In addition, although Bitcoin transactions can be anonymous, but can also be designed to block the chain transparent, so that each transaction can be easily linked to a person or company。
  Banco Santander Central Hispano (BancoSantander) executives, in 2014 the first to realize block chain technology promising Fula (JulioFaura) said that this is a critical point。
Fula has a PhD in electrical engineering, he had engaged in computer chip design, and later obtained a master's degree in business administration。
He is now head of the National Bank of Spain R & D, leading the bank block chain related work。
  Fula said, "the infrastructure of the financial system still works, but obsolete; our work is to study how to block chain technology can help create a better financial infrastructure, rather than the destruction of the financial sector。
"National Bank of Spain has been at the forefront of testing and block chain technology used。
The bank in collaboration with a company called ripple, allowing employees to send cross-border payments alone, this innovation will shorten the processing time from days to hours。
  Merrill Lynch and other banks also working with Ripple。   Although financial transactions take place almost instantaneously, but the settlement process is still very slow and overwhelmed。
The actual delivery of assets usually takes a few days, but financial counterparties tend to use different accounts settlement system, which makes it particularly troublesome dispute。   According to Bain & Company estimates that by a shared block chain and accelerate the package deal may save financial institutions every year 15 billion to $ 35 billion, and in fact make these transactions more secure, because the real transaction records kept by all participants。
  Since the 1970s the United States Securities Trust & Clearing Corporation (DepositoryTrustClearingCo。, DTCC) has been trading settlement, to provide a centralized clearing broker securities settlement site。
The company is now working with and Axoni, R3 two entrepreneurial companies, the size of $ 11 trillion credit default swaps market place similar block chain of distributed books。
  The credit default swaps books will be operational next year。
DTCC After successful completion of a test, the company is also redesigning day of trading amounted to $ 3 trillion of US Treasury repo market。
  Stock trading has also carried out some experiments。 Late last year announced a public securities issued in a block chain。
Also he founded a chain of block trade stocks, but not limited to listed companies whose experiments。
According to this system, developed with the Nasdaq, shares in unlisted companies without the actual transfer of paper records, but many of today's companies are required to do so。   Nasdaq block chain is responsible for the project's Worth (FredrikVoss) said that the pilot is successful, the Nasdaq is considering whether to open more customers。   Nasdaq ongoing experiments are not limited to stock trading, exchange using it to create a block chain technology that allows advertisers advertising the sale and trading。 Nasdaq in Estonia incorporates a proxy voting platform to allow shareholders to vote on the Internet, shows the successful use of the block chain technology it can also be used in addition to the settlement of transactions。
  Other companies are working on similar large projects Hongda。   IBM last week announced that it will cooperate with several European banks, including Deutsche Bank, trade financing transactions on the block chain, such transactions are currently required to take several weeks and use a lot of paper。
  In other areas, block chain technology also tested stored medical records。
This technology was even weird for small-scale projects, such as New York, Brooklyn, a community solar power trading platform。
  But Worth to block chain technology will be more widely adopted it is optimistic, but he said that financial institutions need to get more guidance regulatory authorities。
The government will look at how different cross-border payments made on a closed network?What information needs to be embedded per transaction or per contract?How to properly balance security and privacy?Voss said, and now we are asking these legal issues, they are paying billions of dollars, need more guidance。   We need more and more market participants to enter the block chain technology-driven exchange that it has value。 Voss said it is not a technique to build a faster engine, but to create a new path; if others do not, it does not make sense to grasp。
  Banks also do not want to block chain project staff spend too much or too much hardware, because they know that starting block chain will absorb the majority of the initial upfront costs and risks。   Indeed, a considerable degree on Wall Street this silence。 Bain & Company survey of executives of financial institutions found that about 80 percent of the executives expect the revolutionary technique, where the company will in some way to use the technology in 2020。
However, when the old technology can also play a role, they will use the exact block chain technology did not elaborate on what。   Executives understand that they need to understand the block chain technology, but it is not clear to everyone how this technology will specifically help their business。 WEX payment processing company surveyed 500 chief financial officer, nearly two-thirds expressed a deep understanding of the block chain technology, but only six explains how the technology will be put into practice。
  Bitcoin is set up for the truth of the block chain also applies: only if we believe it has value only has value。
Perhaps the only way their future was limitless。 (Lemon Nan / compiler)。