The Week In Bitcoin - Issue #74: An Unstable Equilibrium

An Unstable EquilibriumThis week Goldman Sachs, Banco Santander SA and Morgan Stanley announced that
The Week In Bitcoin
The Week In Bitcoin - Issue #74: An Unstable Equilibrium
By The Week In Bitcoin • Issue #16
An Unstable Equilibrium
This week Goldman Sachs, Banco Santander SA and Morgan Stanley announced that they’d be leaving the R3 bank consortium. It’s also rumoured that a number of other banks are rethinking their memberships. Although R3 are putting on a brave face, the churn of founding members of their consortium must be at the very least a little troubling. 
Most of the reports (I’ve included a few below) seem to suggest that the ‘collective action’ problem that arose was a little too challenging to solve. With many banks come many perspectives on the how and which problems to solve - and banks have many (perspectives and problems). When you add in legacy systems and the associated issues these bring with them it’s unsurprising the 'equilibrium’ has become unstable. 
It’ll be interesting to see what the banks who defected end up doing. Although some will work with other solution providers (as has been mentioned in the articles) it’s also likely some will put their blockchain ambitions on hold as they refocus their fintech efforts.
I’ll leave the last word on this to Balaji Srinivasan of 21.co who had a great tweet storm on this topic earlier in the year - you can find it HERE.
— Alan Tsen, @alantsen 👊💯
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Consortium Churn
Goldman Sachs Group has dropped out of the R3 CEV blockchain group. The investment bank was one of nine original members of R3, founded in 2014 to explore the use of the distributed database technology in Wall Street infrastructure.
Spanish banking giant Banco Santander is no longer a member of the R3 blockchain consortium, CoinDesk has learned.
R3 CEV launched with nine founding members in September 2015. Helmed by David Rutter, a former executive at interdealer broker Icap, the firm set out to develop blockchain technology for the financial services industry.
Blockchain company R3 CEV has reduced the amount it aims to raise from bank members in its first large round of equity funding to $150 million from $200 million and is changing the structure of the deal, according to a person familiar with the plans.
News This Week
The recent Internal Revenue Service request to Coinbase, seeking records of customers who purchased virtual currency from 2013 to 2015, has led to a flurry of media attention both in the U.S. and worldwide.
A few years ago, Bitcoin advocates were touting its potential to transform the financial sector. “What would happen if you and I could just exchange money without it ever going through a bank?” venture capitalist and early Bitcoin supporter Marc Andreessen asked me in a 2014 interview.
As Wikipedia explains, “Zcash is a decentralized and open-source cryptocurrency that offers privacy and selective transparency of transactions. Zcash payments are published on a public blockchain, but the sender, recipient, and amount of a transaction remain private.”
Months ago, when Adam Back posted this tweet calling Bitcoin Classic “semi-tested alpha code”, I ignored it. But today he posted the following nasty-gram on a Reddit AMA with a bitcoin miner: Adam…
There is a lot of cutting edge computer science being used in blockchain technology and, because there are multiple blockchains and protocols being proposed and tested, there are various experiments going on at the same time. This is all very good in my view. 
So far, developers are calling ‘Spurious Dragon' a success.
Ethereum’s latest hard fork, officially activated at block 2,675,000 today, comes days after the code was first tested as a solution to ongoing network performance issues. Among other changes, the fork will give developers the ability to delete empty accounts left by an unknown attacker that had effectively flooded the network.
Last February, in the midst of Bitcoin’s long-lasting block size dispute, a group of Bitcoin Core developers, Bitcoin miners, and representatives from the Bitcoin industry met in Hong Kong. Sealing their position with a signed letter, the attendees agreed to run only Bitcoin Core-compatible consensus software for the “foreseeable future.” 
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