After Visa, Mastercard and numerous other companies around the world announced their blockchain-based networks in the final quarter of 2017; it seems that almost every major financial institution is trying to do the same.
Sifting Through Half-Baked Ideas
On the outside, it would appear as if the tech industry is currently engaged in a frantic craze to integrate the blockchain into virtually anything that can benefit from it in the slightest. With over $3 billion invested in new ICOs in 2017 and the introduction of many new blockchain-based solutions, that assumption wouldn’t be too far off from reality.
A blockchain does offer tangible, real-world benefits for many applications but it is often difficult to separate half-baked solutions from practical, well-designed ones.
In November 2017, for instance, Goldman Sachs Group and JPMorgan Chase announced the completion of their six-month long test that involved tracking swap contracts on a blockchain platform. At first glance, this is an excellent example of the blockchain craze versus genuine improvements in a sector.
There is nothing inherently special about keeping track of swap contracts and is, in fact, something that can be very easily accomplished without the use of sophisticated technologies like the blockchain. Moreover, maintaining a blockchain of almost any scale requires a significant amount of combined computational resources in exchange for a paltry throughput.
Maintaining Swap Contracts
Despite that logic, it is probably in situations similar to this one where a blockchain flexes its strength, that is, in applications that don’t initially seem to benefit from implementing one. On the surface, maintaining swap contracts can be as simplistic as maintaining a centralized database of current and past agreements.