Why do BANKS like BLOCKCHAIN? – VisualPolitik EN

imagine in this situation you live in London any one of our house in San Francisco the house costs 1.3 million dollars so what comes in first your payment or the handover of the keys if you happen to pay first you might fall into a scam maybe the house doesn't really exist or it's not owned by the person that you contact us don't forget that you live a really long way away from there you never met the person who's selling the house and believe me you're not the first person or the last who's going to lose money through an online scam like this ridiculous as it sounds this is actually one of the most complicated problems that exists in economics and that's trust but I know what you're thinking you clicked this video expecting something about blockchain about crypto currencies or maybe Bitcoin what does all of this have to do with that well I'll tell you [Applause] nowadays we've all heard of Bitcoin I'm sure many of you know of some other cryptocurrencies as well like aetherium litecoin or ripple if you've dug deeper into this matter you might also have heard about another term and that's blockchain for many this cryptocurrency world is the ultimate revolution that's going to end governments and banks fathers it's just another financial bubble that will make it easier for criminals and terrorists to hide their money from the police unfortunately the reality is way more boring than this Bitcoin exchange reaches deal with Barclays for UK transactions but hold on just a second if you thought cryptocurrencies were just a strategy to avoid taxes I've got some news for you Municipality of Chaos o is going to let residents pay their taxes in Bitcoin its mayor has announced so let's start from the beginning shall we blockchain blockchain is a technology just like virtual reality or peer-to-peer file-sharing is a technology as with every technology you can use it for many different things and one of them is cryptocurrencies and one of these cryptocurrencies Bitcoin and as with many technologies you can use it for many different things one of them is cryptocurrencies and one of those cryptocurrencies is Bitcoin but it's not the only one many people think that these new coins will substitute legal money that is dollars euros or any other currency but it doesn't have to be that way in fact cryptocurrencies can do many other things and today we're going to have a look at some of them but now the real question is what is blockchain all about what is it used for and most importantly why a banks starting to use it today we're going to answer all of these questions but before we do let's take a look back at the history what is blockchain used for look bitcoin was born in 2009 nonetheless the technology that it's based on the blockchain was created all the way back in 1991 so let's see how it works without even mentioning the word Bitcoin and why do we want to do this well because it's important to understand the blockchain can be used for many other things and since this is a complicated matter I asked on CEQA one of the hosts of the Spanish visual politic channel to show it to you by drawing which is something he can do and I certainly cannot alright so let me take you back to the example of the house in San Francisco the one that costs 1.3 million dollars in order to buy it you have to sign a contract with the owner but how do you know that he or she is going to meet that agreement how do you know that the house exists if you've never seen it in reality usually we have a trusted third party like a notary verifiers this notary will verify the house exists and that you're talking to the real owner who's willing to hand over the keys when he gets the money this is the way that any traditional contract works and it has many problems first having many parties means that there's lots of waiting time and lots of fees but this is an even worse problem here if someone hacked the computer of one of those third parties you could modify the terms of the contract this means traditional contracts are not as safe as they seem and this is where the lock chain enters the picture in this case instead of using a traditional contract we could use a so-called smart contract this is a little bit of software that executes automatically when something happens in this case you could leave your 1.3 million dollars in a special account so that at the moment when you open up a new door of your house a sensible notice your presence and boom the smart contract will take your 1.3 million bucks from that special account and send it to the seller in case the key doesn't work because you've been tricked then the contract would not execute all right so all of this sounds pretty great but who is going to validate any of this well in this case we don't actually need third parties or middlemen there's no need for notaries whatsoever in this case we have a network this isn't crappie is a company that offers a real estate sales internationally through blockchain well in this case all the sellers and buyers inside of this platform would be nodes of the network and so now you might be wondering so I just want to address it really quickly no company has paid us to do this video we just used the example of this company so we can give a real-life example it makes it more tangible and hopefully more enjoyable so well the great innovation of blockchain is that its users will always have a copy of the contract so all of them can be a point of verification and in case one copy does not match the copy of another node that system will consider this to be fought but not only that this contract will always be stored in what we call a block and this block at the same time will be stored in a chain of blocks this is why we call the system blockchain so if a hacker wants to modify our contract he would have to get into all of the computers from the members of our blockchain all at the same time as you can imagine this is way harder than getting into one computer no matter how secure that computer is and now you might be wondering so any time I start using some blockchain service will I have all the registers and transactions that have been done inside us and the answer is well yeah in fact if you want to have a Bitcoin you should download all of the blockchain which is now over 160 gigabytes and now I can hear many of you saying well come on Simon that's not true I've got a Bitcoin wallets and I didn't have to download 160 gigabytes of stuff well actually of course you do in your case dear viewer what you have is actually a light coin this means that another person downloaded those 160 gigabytes and now that person is letting you use Bitcoin through his or her server this said blockchain is starting to be used for all kinds of things as you have already seen some companies offer real estate deals with smart contracts but there are many many other applications you can even have website hosting with blockchain so any computers inside of a network would have the data other companies offer medical record storage etc etc but oK we've already told you what blockchain is all about now there is a second part and that is well what do banks have to do with all of this and that's something we're gonna look at right now survival of the fittest if there is one thing that generates all kinds of gossip mixed signals and conspiracy theories its cryptocurrencies you just need to google the name of any famous company followed by the word cryptocurrency and you've got some blog that claims that this firm wants to get its own crypto coin or the opposite or both things at the same time this information noise is so pervasive that it is almost impossible to separate the wheat from the chaff and this is also a heads up fur you guys who might want to start investing in this industry watch out I'm not telling you not to but be careful because there is a lot of height and this is why to do this video we talked straight to these sources so that we could corroborate that this is true BBVA and Indra will make the world's first block chain based corporate loan in this case Indra is a Spanish engineering company and BBVA is a large Spanish bank the idea is pretty similar to what we said about the house in San Francisco in this case BBVA signs a contract with Indra and all the members inside of the blockchain will have a copy of the same so what's the advantage of all this well it would prevent internal corruption some people might want to exaggerate the cost of some building in order to get money into their pockets but if they have a smart contract and everybody has a copy of this then they can track every transaction this means that both the company and the bank are protecting themselves from their own workers but we are only talking about loans here as we said before blockchain can be used for many other things and apparently Spanish banks they want to pioneer this here's another example sandtown dare to launch the first blockchain base international money transfer service in this case we are talking again about a reducing verification times you see any time you make an international money transfer you have lots of intermediary banks for instance if you want to send a thousand dollars to a friend in Germany if somebody has to verify that you have a thousand dollars less and your friend has a thousand dollars more and to this the problems from the currency exchange and you have lots of intermediaries that need to be in contact and verify every step of the process companies like a ripple use blockchain to do this in a matter of seconds and this is why Santander will now start making international transfers from one day to the other in fact both Santander and BBVA have been investing in cryptocurrency companies for years the main European banks have all been part of blockchain platforms for years from we trade to the Spanish alas tria but how big a future do these projects have we simply don't know B clearly there's an interest from traditional banks to not miss out on these kinds of new technologies and now I know what you might be thinking so far we've just talked about faster transactions and safer contract it's nothing super exciting right so where is that revolution that some people are talking about well believe me there is certainly a potential revolution here but we are going to talk about that in the coming week in the meantime don't forget to subscribe to visual politic and click on the bell icon so you don't miss any of our posts and now it's your turn so far we talked about banks using blockchain technology what about cryptocurrencies yeah Barclays yes indeed Barclays is offering services in Bitcoin but will they use it as a normal thing will we see all kinds of new services thanks to cryptocurrencies well please leave your answer in the comment section below and also don't forget to visit our friends at the reconsider Media podcast they provided the vocals in this episode that were not minded if you liked this video please do give us a thumbs up as always I'll see you next time and if you want to learn more about politics and here even more of my lovely voice you can join us at me consider media we have a podcast at reconsidered Mediacom slash podcast see you there

37 thoughts on “Why do BANKS like BLOCKCHAIN? – VisualPolitik EN”

  1. Blockchain is reality now and will replace most of legacy banking system in 2019 and social/governance systems soon. Please check if below social moral principles can help in the core fabric this revolution

    1. One should always be ready to accept truth and to renounce untruth.

    2. All acts should be performed after deliberating what is right and wrong.

    3. The prime objective of new Society is to do well to the world, that is, to promote physical, spiritual and social good of everyone.

    4. Our/Every one conduct towards all should be guided by love, righteousness and justice.

    5. We should dispel ignorance) and promote (knowledge).

    6. No one should be content with promoting his/her good only; on the contrary, one should look for his/her good in promoting the good of all.

    7. One should regard oneself under restriction to follow the rules of society calculated to promote the well-being of all, while in following the rules of individual welfare all should be free.

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  7. Bitcoin is one the most big scam ever exist. Here is the very basic scam. Let said, each of 10 people buy 10 coins @ $1/coin. Total coin is 100 and the sum is $100. After a lot of hikes, someone is willing to buy @ $10/coin. One guy sold his 10 coins and he got $100 from the sale. Now, how much money remaining? Still $100. That is meant, the dumb person who paid $100 for 10 coins is already lost $90. Yes, he can buy more and the remaining 9 people are very happy to sold him their coins. That isn't yet consider the lack of interest earn plus deposit insurance that available in some countries.

  8. Kindly make a video how you conduct your research what tools you use and how the process you usually follow

  9. TYCOON69 – FIRST HYBRID BLOCKCHAIN COMMUNITY BANK. bank that guarantee profit. The aim of this bank is to enable people to hold their capital in a more appropriate form than the current Fiat money. And in years proven by the commodity (gold) and at the same time to give people a more modern way of sending capital, in the form of a cryptomain, which is supported by gold. + cashback card. Link: https://tycoon69.com?psh=A3SBYF

  10. if every node has a complete copy of the chain, why would this ever be considered secure from government oversight? Wouldn't they just need a node to trace every dollar's owner and movement? It sounds like a government's best friend.

  11. block chain is just not for money transactions it is untraceable Email SMS text messaging phone calls data storage block chain is just not for monetary exchange exclusively !!!!!!!

  12. I bought 2 houses as a experiment in Dec 2017, each for 1 milion. One was paid with fiat, the other was paid with a smart contract. The house I bought with fiat has gone up a % this year. And the other house bought with the smart contract the seller is now out 66.8% of his bitcoins that he accepted for the house (that came to $668,000 he's out because he never cashed out the bitcoins I gave him as part of the smart contract, as he held onto them thinking they would climb even more). He said to me that if I don't pay him that balance of $668,000 in fiat (as the fiat I pay him on Monday of $1 will still be $1 on Tuesday) he's going to make sure he gets his money. I was shot at last week from a moving vehicle.

  13. You should point out the distinction between public and private blockchains. The major breakthrough of the blockchain is the descentralization of trust, which removes the need for middlemen and empowers peer-to-peer interactions (public bockchain). If you remove this fundamental feature you end up with a complex database, but you can still call it blockchain (private blockchain) and still be the middlemen. Banks are interested in the later.

  14. its kind of weird that you are talking in 2018 about technology of 2010… 8 years late is this channel to reality :S so late…..

  15. Awesome, I love the new camera)
    If I haven't spent hours trying to get what is blockchain about this video would have been way less clear, but this is a bit different perspective, thanks.

  16. VisualPolitik EN
    https://youtu.be/NHmoSyIPrMU ,you got paid by Viktor Orban and Hungarian separatist propaganda agents when you made this propaganda video about Romania or you are just a moronic troll ? .. you should give some explications and get sued ,you fake news terrorist.

  17. So basically blockchain is going to help us trust each other more? This is good, we need trust, and currently we're not honest or fair enough to maintain it (as efficiently as we could). Thanks Blockchain.

  18. Blockchain was not created in 1991. Maybe you mean Proof of Work from the 90s. Solving the Byzantine Generals problem (Probably what you mean by "Blockchain"), was part of the innovation of Bitcoin (2009).

    As for the idea that banks can use "Blockchain" tech for these uses, it doesn't add up. You need nodes, people to host the blockchain to validate the changes to the network. That means you need the whole blockchain downloaded (as you stated). And with the huge number of data being sent through such a network, that blockchain is going to be growing alarmingly quickly. So why would anyone want to spend large sums of money hosting a massive blockchain for a service they use once or twice? What these banks and tech companies are proposing is NOT a blockchain but actually a database… nothing new, nothing innovative, just buzzword "Blockchain" to pretend something is more innovative than it is. Ripple for eg is really a database NOT a blockchain based cryptocurrency because the network is closed. There is no proof of work or more importantly, no client you can freely download to host this imaginary "blockchain". ONLY "trusted" parties can act as nodes in the Ripple network and that means it is exactly like the banking system today using a Database to manage account balances.

    Still it's nice to see videos trying to look at the technology and the use cases rather than the money to be made. If you ever need any technical advise on cryptocurrencies (most specifically Bitcoin) feel free to message me. I've been watching your videos for some time and would be happy to give something back for all the hours of entertainment/education.

  19. The only types of people using crypto currencies are gamblers. Hardly any actual purchases are occurring in crypto currency.

  20. @VisualPolitik EN are you being payed or are you as dumb as fuck? Crypto currencies and smart contracts are like banks and stuff signed with hard asymmetric certificates except far more expensive (distributed across many people so that not a single person has to carry the burden of the entire cost of a single transaction) and slower (yes slower – the blockchain technology is slower, the banks just tend to run things in time slices called cycles so that they can pay less for maintenance as the system has no real time requirements and they can use money for other things while it is in their bank – nothing to do with technology, just with rules). Smart contracts are trust worthy while inside the same system (buying coins with coins of the same crypto currency) other than that it requires a trusted third party that guarantees to the system that what is outside the system (the house) is really there and the person that is selling it inside the system is really the owner – for that stuff you need third party to confirm something and that is a state with laws. Long story short: cryptocurrencies and block chains are buzz words with no technological value compared to existing technologies and european union's PSD2 laws and co are far more impactful and useful (and this is most likely destroying the monopoly of banks over accounts based on the kick in the butt that the world got from crypto currencies hype so they weren't useless – were in fact really useful in EU – but from technology standpoint they are useless)

  21. Apparently tax payers in that Swiss town that will accept bitcoin for taxes, can only pay up to 250 Swiss francs (US$ 260).

  22. Bitcoin is the slowest moving "world changing event" in history. If the internet had developed at this rate we'd be figuring out this weird concept of "digital mail" about now.

  23. You don't need to hack whole network in case of smart contracts you are talking about. You just have to hack oracles. And thats the whole problem with all blokchains that are trying to solve all this problems. Only working use case for blockchain is money aka Bitcoin. All others are scams or in best failed projects.

  24. "if you want to have a bitcoin, you should download all of the blockchain"… What?! This is complete bullshit

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