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mrbluze writes:
"An interesting blog post by Charles Hugh Smith on Why Banks Are Doomed: Technology and Risk.:
The funny thing about technology is that those threatened by fundamental improvements in technology attempt to harness it to save their industry from extinction. For example, overpriced colleges now charge thousands of dollars for nearly costless massively open online courses (MOOCs) because they retain a monopoly on accreditation (diplomas). Once students are accredited directly--an advancement enabled by technology--colleges' monopoly disappears and so does their raison d'etre.
The same is true of banks. Now that accounting and risk assessment are automated, and borrowers and owners of capital can exchange funds in transparent digital marketplaces, there is no need for banks. But according to banks, only they have the expertise to create riskless debt.
...
One last happy thought: technology cannot be put back in the bottle. The financial/banking sector wants to use technology to increase its middleman skim, but the technology that is already out of the bottle will dismantle the sector as a function of what technology enables: faster, better, cheaper, with greater transparency, fairness and the proper distribution of risk.
There may well be a place for credit unions and community banks in the spectrum of exchanges, but these localized, decentralized enterprises would be unable to amass dangerous concentrations of risk and political influence in a truly transparent and decentralized system of exchanges.
It's still early days, but can new electronic currencies such as Bitcoin become mainstream without the assent of governments?"
(Score: 5, Informative) by beckett on Monday February 24 2014, @11:46AM
this is a really good question. the incentive to maintain the blockchain will be in the transaction fees paid out to the mining node that propagates a transaction along the chain. however, the last block to be solved (i.e. #6,929,999) won't happen until ca. 2140, so well after everyone except ray kurzweil has passed on.
by the time this occurs, bitcoin mining will have long moved out of the hobbyist basement and into the hands of corporations and governments. It is in interest of cryptocurrencies now and in the future to have an even, worldwide distribution of power-efficient mining systems (e.g. asics) to maintain the blockchain, and to avoid the rush of a lot of computers getting the 51%.