When the CTO of the company that holds the most blockchain related patents comes out and makes a claim as bold as this, you begin to wonder whether there is any truth in it. However, in a recent interview Cathy Bessant – Bank of America CTO – came out and slammed blockchain and distributed ledger technology (DLT) saying it has no significant use case and could be worthless in a few years’ time. Bank of America (BOA) currently holds 82 blockchain related patents, and Bessant has allegedly been responsible for either filing or giving the application the green light.
Could Bank of America Really Feel This Way?
BOA hasn’t signed up to any of Ripple’s platforms like many other banks from around the world and it very much appears to be heading into the blockchain and DLT space alone. It has filed for the most blockchain and DLT patents, backing up the theory that it’s preparing to go at it alone. If Bessant’s opinions do echo the feeling from other top members at BOA, then the bank could simply be stockpiling patents just in case the technology does become more mainstream rather than BOA looking to create its own use cases.
Bitcoin is Still Cheaper Than BOA Transactions
A recent report showed that BOA is charging $45 for a $90,000 transfer, while BOA is only charged 83 cents per transaction. That amounts to a whopping 87.2% profit per transaction and makes it more than 6,000 times more expensive to use than Bitcoin. When it comes to transferring large sums of money around the world, the fees can quickly add up – especially when BOA makes so much profit per transaction. Blockchain and DLT can help reduce the cost of transferring money well below the 83 cents BOA is currently charged, so why isn’t it looking at using the technology it owns the rights to?
New Technology Means Smaller Profits
There could be a simple explanation behind BOA not wanting to use blockchain and DLT – money. If BOA can cut the cost per transaction down from 83 cents to 12 cents by using one of Ripple’s networks, then customers would demand that their fees are reduced as well. BOA then wouldn’t be able to get away with charging a massive 87.2% markup and would see smaller profits – after all, money makes the world go around.
There you have it; Bank of America’s CTO is saying there are no use cases and blockchain will be dead in the near future is clearly a sign that BOA will end up reporting smaller earnings. Bessant’s claims that there are no current use cases are rubbish, as big firms like IBM, Ford, the EU and Australia have all been using this technology to the benefit of their clients and citizens.