Blockchain’s Numbers Don’t Add Up

It has big ambitions to revolutionize finance. But those aren’t matched by its funding or manpower. The blockchain industry is either hugely under-resourced or hugely over-optimistic. Probably both.Despite a constant trickle of initiatives from the world’s largest banks — Deutsche Bank, Santander and UBS were the latest to tout a new settlement currency last month — the numbers don’t yet add up.Annual cost of existing systems$150 billionPick up any one of the stacks of white papers on blockchain out there and you’ll see bold and big forecasts about what the technology could mean for banks.Existing IT systems for operating in capital markets cost between $100 billion and $150 billion a year, according to Oliver Wyman. Clearing and settlement fees are in the region of $100 billion. It’s easy to see how a secure and decentralized transaction ledger, distributed and verified across a whole network of banks, could shave an easy 5 percent off these


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