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Andreas Antonopoulos’ Folly On Private Blockchains


Justin OConnell · @cryptoassethq | May 11, 2016 | 11:48

Antonopoulos Op-Ed

Andreas Antonopoulos’ Folly On Private Blockchains


Justin OConnell · @cryptoassethq | May 11, 2016 | 11:48


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”

R3 AntonopoulosTell 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.

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