> And that company is exactly what this tech. replaces. That company does not provide its services for free. This blockchain product does.

There’s no such thing as “free”. You’re either paying directly or indirectly. The DTCC is owned by its member organizations so it does not have a direct profit incentive anyway.

I highly suggest reading more on the topic and the problems it’s meant to solve before pitching “But blockchain!” as a solution.

It doesn't need to have a profit motive to cost more. It's costs are what cost more.

But there is no reason for it to cost more than a private blockchain solution.

Sure there is, simply by virtue of being the only solution available. All of a sudden, a simple database becomes a sprawling corporation with a multimillionaire board of directors, waging political war among themselves for resources, power and an ever larger number of underlings.

The private sector is not magically superior to a state bureaucracy, without any competition or political pressure to reform it can act even worse.

> a sprawling corporation with a multimillionaire board of directors, waging political war among themselves for resources, power and an ever larger number of underlings.

A blockchain does not get rid of those things.

Erm, yes it does. DTCC has a board of directors. It is a company. This blockchain eliminates that. Literally.

Can you explain? To me, it seems like control is what matters. And the DTCC controls access to its databases, whereas JPM controls access to its blockchain. Whether the parent organization is adding a +1 to a database or a +1 to cryptographic ledger seems inconsequential.

>JPM controls access to its blockchain

Only for the initial group of banks invited to participate. After that it would be up to the consensus algorithm to decide if a prospective member can join.

> DTCC has a board of directors

A large business "has" a lot of things. Why bring up board of directors specifically? I'm sorry but this sounds more like fumbling to grasp a point rather than an actual example of something useful.

I didn't bring it up, the comment you responded to did. You said that it didn't get rid of it, but it does. It gets rid of the entire DTCC company, and all of the salaries that go along with that. All of those costs go to zero.

I'm talking about competition, whatever the technical implementation. That's precisely the point, cost is determined by market structure and incentives, an inferior solution can be much cheaper due to lower margins.

I'm not sure I understand your point. Blockchains do not get rid of competition.

They don't but most competition does lower prices which is his point.

Who's pitching "but blockchain"?

While you show clear ridicule for some sort of "blockchain fad", I don't see anyone pitching a solution here.

I see JPM literally implementing one, and I would assume there is a cost reduction they've calculated.

Typically the cost reduction expected is due to eliminating rent seekers.

Which rarely happens, as new rentseekers replace old rent seekers.

It's not going to be free once they finish paying the army of developers each bank will have to keep on staff to manage it.

You mean like the army of developers required to run an ethereum node?

Or the fact that their coin / Quorum IS Ethereum, so most of the work will be done for free by core devs

You seem to be missing the point. Operating this blockchain is nearly free. Building it out is a capital cost. Once its built, its ongoing expenses should be low.

There's nothing to built... 1. `git clone ethereum jpmorgancoin` 2. profit

You two were actually saying the same thing.

How does this product operate for free? Who's paying for the miners?

You don't mine in a permissioned system like quorum. The CPU load is minimal, and when running the quorum clients, you are basically just checking to make sure everyone in the system agrees on the transactions. If someone tries to cheat (or spam or whatever), you kick them out.

But then we're back to square one, aren't you basically describing a distributed (but still perfetly "trustful") database? Isn't that effectively what this DTCC provides?

What in this allows JPMorgan to provide the same service for free? Is it really technical innovation or is it just a different business model? Wouldn't they be able to do the same thing without using anything cryptocurrency/blockchain related?

I feel like I'm missing something obvious but I don't see what it is.

A blockchain is a distributed non trustful database with a method for resolving disputes built in. Roughly speaking in something like quorum, everyone checks everyone else's work, and the majority consensus is ground truth. DTCC requires a trusted third party to administer the database. Quorum doesn't. Quorum could presumably also replace intra-bank transactions as well (instead of maintaining some other kind of database).

I guess the missing piece that seems to break people's brains; the ledger in the distributed database represents a dollar amount (in the case of quorum's dollar thing) and it has money-like rules, unlike, say, postgres which ultimately relies on some other piece of software to make ledger like transactions.

Unless I am mistaken, DTCC doesn’t provide any trust for internal account balances at JPMC. It only provides trust for the details of transfers. These tokens provide trust before and after transfers. The tokens themselves actually provide no trust during transfers and the transfers are only allowed by trusted parties as a result.

Also, DTCC only handles securities not currency so this doesn’t exist at all.

What actually you should be arguing is that the JP coin and the DTCC need to be combined as they each only provide trust in a certain part of the ecosystem.

Technology can be more than new things; it can also be made of combining old things in new ways, or finding new uses for old things, or even simply new ways of thinking. If we removed "cryptocurrency" and "blockchain" from the above, they'd still have a new settlements process. They're using a distributed ledger to make the process safely automateable and reduce audit costs.

what you're missing, that's obvious, is that blockchain is a solution looking for a problem where none exists. The word was imbued with virtue, and at this point blockchain has come to mean 'virtuous database'

If someone tries to cheat, you suspend their participation if you are empowered to do so, and / or report them to the appropriate regulatory bodies / law enforcement.

Blockchain doesn’t allow anyone to circumvent anything.

Unless it’s a perfectly spherical blockchain operating in a vacuum.

>If someone tries to cheat (or spam or whatever), you kick them out.

Or, if someone doesn't pay for access, you kick them out? Or if someone is your competitor, you kick them out?

It is a technology for trading with other banks.

If you want a chain that doesn't allow transaction censorship, you need something else, like a proof of stake or proof of work blockchain.

Permissioned blockchain generally doesn't have wasteful mining because all the participants are known. So the nodes just end up signing transactions. Double spend attempts can then be prosecuted.

Sorry, there may be small fees paid to the miners. But those fees will presumably be dramatically less than this current company charges.

You are putting a lot of weight on "presumably." Someone has to pay for all that mining. Or, you know, skip the mining and your costs should be lower.

They do skip the mining. Mining defends against Sybil attacks, which you don't have to worry about if you know who all the participants are.