Are Private Blockchains Good Enough?
First Global Credit’s Comms Director Marcie Terman weighs in on the Public vs Private Blockchain debate. Cross border payment processor Earthport is the latest established company to throw its weight behind the adoption of blockchain technology for banks and other orthodox financial service providers. The company is driving this with the message, “you do not have to endure the risk of working with a start-up to benefit from blockchain tech.” Earthport, a mature company, is adding a range of blockchain based services to the existing menu of what they offer their banking and corporate....
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Many people argue that private blockchains, run by private firms, are useless, since they make users dependent upon a third party ‒ the firm managing the blockchain. Many believe that private blockchains currently being considered are not blockchains, but rather, distributed ledger technology which has already existed. Others believe private blockchains could provide solutions to many financial enterprise problems that Bitcoin does not, such as abiding by regulations such as the Health Insurance Portability and Accountability Act (HIPAA), anti-money laundering (AML) and know-your-customer....
Blockchain technology has won accolades for improving efficiency and transparency in business operations. It has also been seen as improving security. But blockchain security is a complex issue that pits anonymity against trust, according to IBM’s Security Intelligence, a thought leadership and technical expertise hub for executives who manage enterprise risk and security. Permissionless blockchains such as bitcoin’s do not require identity information from their participants. The bitcoin blockchain achieves trust through encryption. After each transaction, the cryptographic operation....
Investor Fred Wilson, co-founder of Union Square Ventures, thinks banks are missing the most important opportunity bitcoin offers by building private blockchains. Speaking on a panel with Nathaniel Popper of The New York Times at the CB Insight “Future of Fintech,” he said the transformative value of virtual currency will be on a public blockchain, as reported by the Observer. Private blockchains copy the distributed approach of public blockchains but hide it inside the servers that their creators have given permission to maintain a copy. Private Blockchains? Think Compuserve. Wilson, a....
Blockchain technology is rapidly transforming the world and the web as we know it. Since the technology was first unveiled, there has been a substantial increase in the use of both public and private blockchains across an array of industries. In fact, government organizations, too, are starting to adopt blockchain for better security, traceability, and […]
A few months ago I was writing a research paper centered on this question: Is there a use case for private blockchains? I'll be honest, I started writing it with my conclusions already on mind. I was totally biased. My thoughts were basically that private blockchains (and the lack of PoW) couldn't offer more security than a distributed database. And at the same time they were pretty limited and based on a much more immature technology. So, why on earth a bank or any organization would use a private blockchain instead of a well known and proven technology? Simple answer: fad. Nevertheless,....