Asking for blockchain without bitcoin struck Marc Andreessen as wanting “online” without the Internet.
Siddharth Kalla, the chief technology officer of Acupay, a technology provider in New York specializing in cross-border finance, believes Andreessen was astute when he tweeted this observation in December.
Kalla, writing in American Banker , is the most recent financial observer to take issue with financial institutions trying to isolate blockchain from bitcoin. What History Teaches
When the web began making waves in the mid-1990s, private companies began to create proprietary information-sharing networks like AOL and CompuServe. These private networks did not survive the Internet, which won out because it was not restricted to the big players and bogged down by proprietary protocols.
Banks, Kalla noted, are similarly at risk of making the same mistake in backing private distributed ledgers, or private blockchains. They should instead invest their intellectual capital in enhancing the appeal of public blockchains and the virtual currencies – such as bitcoin – that open-source ledger systems enable.
What the Internet and the web have taught us, according to Kalla, is that groundbreaking technology is usually built on open protocols in a level playing field where anyone can innovate regardless of influence. Google and Facebook became possible precisely due to the web’s open nature. Why Private Ledgers?
The use of private distributed ledgers can bring immediate improvements to some of the financial service industry’s infrastructure, particularly in securities settlement back office. But the idea of proprietary networks for the financial services industry is, as Andreessen put it, like wanting “online without Internet.”
The primary purpose of public blockchain is the transmission of bitcoin, which has limitations that currently limit its use. The number of transactions per block is restricted, and the bitcoin community is currently debating how to best address scalability concerns.The bitcoin smart-contracts platform, being […]
