Banks and financial institutions have promoted the word “blockchain” as a mysterious piece of software that will bring billions of dollars to banking and save consumers millions of dollars in fees. The only issue with this is, with over two years of testing, research, and implementation, not a single successful demonstration has been released to the public.
As such, the only successful implementation of the blockchain technology to date is bitcoin, which operates as a reliable and secure digital currency for users, traders, and businesses in the network. What the bitcoin network lacks in functionality and adaptability is compensated by its unprecedented security measures and protocols.
Private blockchains, also referred to as permissioned ledgers and centralized blockchains, are networks that replicate the structure of bitcoin without the proper utilization of cryptography, encryption, and decentralization. Essentially, they are federated databases that hold the capability of processing cross-institutional settlement of data.
Since 2015, an increasing number of banks and financial establishments have announced their interests in the blockchain technology. They’ve created a variety of consortiums, blockchain labs, research centers, and startup accelerators to integrate private blockchains into their systems. With the world’s most talented developers, banks have been struggling to show a working demonstration.