Kvě 11

Andreas Antonopoulos’ Folly On Private Blockchains

Source: bitcoin


Editor’s Note: The following article is the opinion of the writer. It has started debate along with both positive and negative reactions. All voices should be heard and acknowledged.

Andreas Antonopoulos and others are perpetuating a misconception about the nature of power by advancing the notion that the most monied institutions on the planet won’t crack the code for their own blockchain-based systems. Antonopolous claims that, if a blockchain is not an “open” — or public — blockchain, then it “ain’t worth shit.”

Also read: Andreas Antonopoulos Makes Bold Prediction on Bitcoin Consensus

Antonopoulos: ‘If it ain’t open, it ain’t worth shit”

Tell that to the people investing millions, likely soon to be billions, in just that.

The question Antonopoulos brings up has little to do with distributed ledger tech, blockchain or bitcoin, but rather the way in which power works in our world.

Power is the influence an individual or organization holds over others. Power allows individuals to sway worldly events and worldly relationships. Power allows people to control others. Increasing amounts of power can be obtained by various techniques.

In R3, the most powerful institutions on the planet have united in order to thoroughly investigate the possibility of blockchain technology — namely, private technology —  in streamlining banking and governance processes. A consortium of the world’s power-brokers, R3 members are already proposing systems and schematics. In many cases, these banks are exploring private blockchains or confederated-consortium chains.

Antonopoulos argues these firms will fail. There won’t be functional private blockchains. What Antonopoulos ignores is the sheer amounts of money these institutions have.

Antonopoulos’ notion that these financial institutions will not succeed in developing a private blockchain is similar to a misconception in another nascent industry: cannabis. In cannabis — an industry that evolved underground for much longer than Bitcoin — many participants believe that the foremost bio-technology firms on the planet, like Monsanto, will not be able to quickly create and patent their own strains of marijuana. As scientists in the space will tell you, that is a naive thought. Major corporations — with billions, and even trillions, in assets — have the best in scientists working for them, as well as the best in technology. They will be able to create new, potentially superior strains in mere years, patent them, and offer them at better prices than “mom and pop” growers.

Similarly, technology firms like IBM, Intel and Red Hat can afford the very best developers. If developers are not interested in working in the corporate world, the economics of the situation do not suggest they will go and work for an online creation community like Bitcoin, with its uncertainty, and pay based on future bitcoin price gains. Almost invariably, they will go where the money takes them. True believers work on Bitcoin, not those agnostic to how their wealth is obtained.

In reality, the brightest minds in technology seem to be moving towards experimenting with private blockchains. Most of their time will be spent on experimenting with how to  secure such systems. What they develop in the future, we cannot know in the present. At IBM, the developers there will tell you that Bitcoin is not secure. And that, in fact, it is they who will crack the code for truly securing a blockchain system. And, in their minds, they will have done so for the first time. 

The shortcomings of Bitcoin’s security system have long been known. Hal Finney took issue with the CO2 emissions of Bitcoin’s demand for wasteful computing power.

Antonopoulos doubts the effectiveness of the power held by the most influential organizations on the planet to guide the evolution of blockchain technology, and how it is perceived. To think, as Antonopolous seems to think, that an unprecedented online creation community will successfully figure out how to implement blockchain technology for consumers is extremely risky conjecturing. Consumers are for more likely to trust brands that have spent billions upon billions on marketing over decades than a tyranny (or democracy, depending upon who you ask) of online developers.

Antonopoulos’ line of reasoning parallels that among many Bitcoiners, particularly the libertarian and anarcho-capitalist factions, who believe Bitcoin will replace the modern financial system. While a fun notion to consider, there is little objective evidence for this happening. Let’s take a look at a disruptive technology — the Gutenberg Technology — to which some have compared Bitcoin. If the most popular book printed on the Gutenberg press were a science book, I might more easily accept the notion that Bitcoin could become the keystone banking system. But, that book was the Bible. And, still today, the world is marred by fantasies about the way things truly are. We are drowned in a sea of ignorance. Could it be, similar to the Gutenberg press, that not decentralized money is propagated by blockchain-inspired technology, but, rather, the furthering of baseless, fiat currencies?

Many deep minds in the technology space believe that a private blockchain is a possible iteration for the technology. Indeed, these people have spent more time on developer forums and developing for blockchain technology than Antonopoulos himself (and, admittedly, myself).

In summation, there will not only be public blockchains, and public-confederated blockchains. There will also be private blockchains, private-confederated blockchains, and maybe even state-enterprise blockchains.

What do you think about Antonopoulos’ opinions on private blockchains? Let us know in the comments below!

Images courtesy of LondonReal, R3.

The post Andreas Antonopoulos’ Folly On Private Blockchains appeared first on Bitcoinist.net.

Andreas Antonopoulos’ Folly On Private Blockchains

Úno 08

R3 CEV Is Only The First Step of Distributed Ledger Technology In Finance

Source: bitcoin


To many people, it seems inevitable that the blockchain will be a part of global financial services in the years to come. With multiple financial players actively working on projects revolving around distributed ledger technology, it only seems to be a matter of time until both worlds come together. However, the progress of introducing blockchain technology in financial services will not happen overnight, and there is plenty of work to be done.

Also read: How The Blockchain Will Change Real Estate

The Many Advantages of Distributed Ledger Technology

There is no denying the blockchain can offer a multitude of benefits to established financial players. Among the positive aspects are speeding up transactions by a significant margin, reducing overhead and transaction costs, and creating a global financial network. None of these benefits are possible through the legacy system financial players are using today.

Furthermore, there are security benefits to keep in mind as well. Rather than using centralized points of failure to record and process transactions, a distributed ledger would even out the workload among different locations and increase service uptime to as close to 100% as possible. However, that does not means banks are not looking to exert some control over what happens on the blockchain, which leads to the creation of alternative distributed ledger systems.

When people think of a blockchain solution for financial players, no one should expect them to use the distributed ledger powering the Bitcoin protocol itself. Instead, private blockchains will be created, which will remain in full control of banks and other institutions. To make matters worse, private blockchains cannot communicate to one another without using a third party service provider.

But that is not the only worry, as the term “blockchain” is being used for a variety of technological concepts, regardless of whether or not distributed ledger technology is involved. While it is only normal to see great excitement go hand in hand with technological innovation, overusing the term can lead to so-called “blockchain fatigue”, which will stifle growth in this sector.

Implementing distributed ledger technology in the financial word we know today will not be an easy task. Banks will not relinquish their control over consumer’s funds that easily, although their attention on the blockchain – through projects such as R3 CEV –  is a step in the right direction. At the same time, this technology could end up disrupting the banking industry altogether, and there will always be a certain level of caution when talking about distributed ledgers.

Solving Problems One Step At A Time

Furthermore, many Bitcoin users feel how the blockchain will eventually replace the banking infrastructure present today. If this were to be the case, distributed ledger technology would bring financial services to the unbanked and underbanked regions of the world. This powerful protocol we call the blockchain certainly holds all the cards to make that idea into a reality.

That being said, the future might not be as black-and-white as some people imagine it to be. The blockchain can either completely change the financial world as we know it, or complement it and create an economic ecosystem anyone in the world can use. In the end, all that matters is that financial issues are being solved one way or another.

What are your thoughts on the distributed ledger technology in finance? Will it complement or replace/ Let us know in the comments below!

Source: Finextra Paper

Images courtesy of Shutterstock, R3 CEV

The post R3 CEV Is Only The First Step of Distributed Ledger Technology In Finance appeared first on Bitcoinist.net.

R3 CEV Is Only The First Step of Distributed Ledger Technology In Finance