Deutsche Bank report objectively analyzes the current status and prospects of Bitcoin

[Abstract] Although the Deutsche Bank report pointed out that Bitcoin has failed to achieve its original vision in some aspects, it also pointed out that: "Although it is still in its early stages, blockchain technology has the potential to revolutionize the financial industry, which is characterized by layered and centralized networks in many markets."

     A new research report from Deutsche Bank AG suggests that the Bitcoin network has failed to live up to its original vision in some ways.

     A recently released Deutsche Bank document states that the Bitcoin ecosystem now includes “a large number of financial intermediaries,” despite the fact that Bitcoin is a decentralized P2P cash payment system with no physical company.

     These intermediaries reportedly include bitcoin exchanges and currency exchanges, which author Heike Mai claims highly concentrate the liquidity of money within the financial system.

Mai wrote:

   "Bitcoin was originally created to create an independent system that is different from intermediaries and central agencies, and to some extent a lifestyle innovation. The Bitcoin ecosystem now includes a large number of financial intermediaries, such as Bitcoin exchanges and exchanges, which reflect a trend towards centralized payments."

     Overall, the report seeks to examine the role of cryptocurrencies and the broader shift toward distributed, real-time payment systems, with Mai noting that emerging technologies could offer “entirely new” designs for such a system.

     “While still in its early stages, blockchain technology has the potential to revolutionize the financial industry, which is characterized by layered, centralized networks in many markets,” the report said.

     In addition, the report analyzes how different types of open and closed-loop payment systems can achieve real-time global payments and receipts, and provides a prospect analysis of how various types of payment systems can achieve this goal. The findings show that Deutsche Bank AG joined the R3 distributed ledger consortium in September this year, which is an optimistic view on the potential of decentralized encryption technologies, as their future prospects are uncertain:

     “Given the early stages of development, it is unclear whether blockchain technology is suitable for supporting a major instant retail payment system.”

Instant processing:

     It’s worth noting that both cryptographic ledger systems and paper-based discourse have, to some extent, succeeded in bringing real-time payments to a relatively small market.

     The report points out that while Bitcoin transactions may take 10 minutes to confirm, consensus systems such as Ripple Protocol technology can support successful transfers in seconds. Nevertheless, the author believes that the biggest problem with the use of these systems is that the technology has only been tested on a small scale so far. Therefore, the scale of the network should be expanded, and Mai also speculates that the new test pressure may reshape public blockchain technology similar to Bitcoin .

     “Skeptics predict that decentralized payment systems will not be able to compete with centralized payment systems due to cost issues unless they focus more on processing the system,” he wrote.

     In addition, Mai also mentioned that blockchain systems still face many unresolved legal issues, such as how laws can be enforced without a centralized agent on the network.