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comment by orbat
orbat  ·  365 days ago  ·  link  ·    ·  parent  ·  post: Neither Bitcoin nor Ethereum are particularly decentralized

    The Federal Reserve has a blockchain working group. Most of the big names behind the Ethereum Enterprise Alliance are also backing Hyperledger.

And I think this is indicative of the future. Hyperledger especially is an interesting concept, as it's more of a toolkit for building decentralized systems with a strong emphasis on trust — specifically removing some of the need to trust your counterparty, and replacing it with trust in (or "generated" by, however you want to put it) the infrastructure itself.

    There's no reason Paypal or Venmo or Western Union need to use ACH. They could (and will) use a blockchain of some sort. It's pretty clear that Bitcoin won't be that blockchain but whatever blockchain it is, it has to be prevalent and agile enough that companies sign onto it.

Most current DLT-based systems don't seem viable as tools for the payment services field, due to a variety of reasons — scalability, features, ease of use, and so on. Out of the current batch, I think Stellar / Ripple or an approach like them has a good chance of being a major player in the future. They have a limited and trusted set of nodes that validate transactions and create new ledgers/blocks (basically a Proof of Authority scheme where you can decide which validators you trust, but you can use a default trusted set), meaning the entire network doesn't have to participate in the consensus process. They also specifically target payment service providers and payment gateways by providing features like payment paths and freezing accounts. They also have an on-chain governance mechanism, which a lot of platforms lack. Not to mention that they're already being used by a number of different banks.

It'll be interesting to see where we end up in 5 or 10 years.