> Yes, but centralized databases are a solved problem. It doesn't take 3-5 days for Amazon to process an order, or for github to process a pull request. The problem is here:

With the current state of the art[1], it takes several days to settle a transaction. In 2016, this is really not ideal.

> Right, so you could replace the entire thing with a single centralized database, and cut the processing time to ~0. And you wouldn't need to develop any new technology to do it.

I could think of several problems, mainly around trust. Who hosts it? How is access managed? A regular SQL database makes sense if it's within a single institution, because presumably you trust your own employees to enter trade data with the best of intentions, but this trust isn't there for external parties.

It's not the storage which is the issue, it's the verification. If you are (made up example) JP Morgan, and you've sold $500m in bonds to a mutual fund, both parties know for sure that everything went smoothly if their copy of the blockchain tells them that it went ahead (just like you know that your Bitcoin wallet contains x bitcoin, and if you send that balance to an address, that transaction is absolutely confirmed beyond doubt). The transaction and settlement happen at the same time, instead of a 3 day process which is the situation today (for stocks). They don't need an expensive, external authority to tell them that everything went smoothly, they can confirm it themselves much faster and cost effectively.

Here's a presentation by UBS, exploring possible use cases for what they call "smart bonds": https://www.youtube.com/watch?v=jgJxEHwj-XU (around 4:00 he speaks about the benefits of smart bonds)

> Of all the places blockchains make sense, an industry with universally used, completely trusted, and heavily regulated central clearing houses seems like the worst possible case. No?

I could be wrong, but I think what's being proposed with these private blockchains is that the central clearing houses' role would be reduced to being an arbitrator in the case of disputes between industry players, e.g. in a proof of stake network, the own enough % to confirm a transaction or roll it back (maybe their role is even eliminated entirely). Whether or not this actually happens will depend on legislation of course, not technology.

> Or to put it another way: How come Amazon never talks about using private blockchains to manage inventory or payments to their sellers? Wouldn't all the arguments in favor of blockchains among banks apply even more strongly to using them within Amazon?

Probably because Amazon is a hugely powerful entity, and it's sellers have no power to demand equal access to a shared database. All (most of?) the large, important transactions happen on an Amazon database, which isn't the case in the financial sector. Plus Amazon is a growing business, whereas in investment banking growing revenue is a huge struggle post-2008 with newer regulations so there is a rush to cut costs and inefficiencies.

Disclaimer: I'm not an expert, this is based on what others have told me, and research papers I've read.

[1] http://www.investopedia.com/terms/s/settlement_period.asp