Evangelizing Ethereum vs. Private Blockchains

#1

This is a topic that largely has been ignored in the social space, but being on the enterprise side of things, I get consistent pushback almost every day on why companies are nervous about using public blockchains (particularly Ethereum) against private, permissions networks like Hyperledger/IBM Blockchain, Quorum, R3, Corda, etc.

This is a huge concern because while a lot of people are focusing fighting against Bitcoin maximalism, or other chains like EOS, etc - quietly a lot of companies are ignoring every public chain in favor of these private iterations largely sold to them by IBM or other companies just seeking consulting fees.

There has to be a unified language approach here, and a significant push from the Ethereum community to make it known basically that private chains are not in any way superior, and are in fact less secure and offer no real benefits.

These private chains are a bigger competitor to public Ethereum than Bitcoin or EOS or even Polkadot ever will be, and if we want to advance Ethereum this is the fight we have to focus on

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#2

I agree with your points. I see private chains at this stage as a necessary evil, but a good step in the evolution to public chains.

Big companies are risk averse, so if they want to experiment with a closed beta then private chains seem like the way to go. If it doesn’t work, delete all chain-data and begin again. They are also not affected by the growing pains and economics of public chains, like when some cryptokitties made everything slow and expensive.

Also, rather than using ‘private’ I prefer ‘permissioned’ as a term. If you need reconciliation for certain partners, maybe a permissioned chain is the way to go. I personally don’t see it as competitors but as a pattern in the current blockcain architecture. Like I don’t see intranet as a competitor to internet but as a a necessary component of the whole infrastructure.

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#3

The concern we see is that companies are being sold private/permissioned chains as the solution, not the experiment. This is IBM coming in and basically selling the buzzword of blockchain without a real solution, and charging millions in the process. Imagine that revenue going to public Ethereum-based companies

#4

It might be a concern, but meanwhile EY is also approaching big enterprises with open public chain technology.

So I’m not that concerned if those companies choose for permissioned now, I’m glad that people are helping to develop the ideas and business cases of dlt/crypto in these companies.

Enterprises aren’t stupid. I’m convinced that over time, enterprise-architects will learn the difference between permissioned and unpermissioned and choose according to their best interests.
Meanwhile ethereum is free software, so no-one is held back to setup a company and bid on the same contracts as the IBM guys. EEA has a nice member list.

I’ve seen some gov. tenders which where won by companies which built their solution on public ethereum chain. Could always be more, I suppose.

#5

They definitely aren’t stupid, but a reminder that the EEA is also supporting permissioned systems like Quorum and is in no way specifically for the public network - in fact most of them are permissioned, and EEA even “joined Hyperledger”. We are already bidding on bringing these contracts to the public mainnet, but my biggest point here is there absolutely needs to be a concerted push from the community to denounce permissioned networks as largely just “Blockchain as a Buzzword” rather than a proper use case. I don’t think the Ethereum community realizes how permissioned chain ‘snake oil’ so to speak is basically badly poisoning the blockchain well in enterprise, so we need to actively fight it.

Plus, people actually leading blockchain initiatives in companies get entrenched - they have to feel like they found out that permissioned is generally bad. Once they pick a horse they stick with it - look at EDI in Logistics and Supply Chain. EDI was first developed in 1947, and is still the de facto standard today unfortunately despite being inefficient, not really trustworthy, and not really standardized.

EY is a good move. Moody’s recently came out and said the same.

I see the enterprise reluctance daily - so all I’m saying is we need to make an effort against it.

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#6

I understand the concern, just not sure I share it to the same degree.

The big(ger) projects like Quorum seem to be eyeing permissioned chains simply from a privacy standpoint, which does make sense. That said, I’m with you on the misguidance of selling permissioned chains as the end goal. Personally, I think those paths will eventually lead to dead ends all on their own. I’m not sure it will take an effort from the community to change minds, time will do that.

A lot of the recent zk-____ work is addressing these privacy concerns, and is actually moving faster than I expected. I have a lot of faith in our ability to provide privacy preserving capabilities on the public chain.

As for the “when enterprises pick a horse, they stick with it” , I agree. There can be quite a bit of sunk cost fallacy in boardrooms. I think a number of large, high-profile companies will simply back the wrong horse. Unfortunately, they’ll just pay the price in migration efforts later on.

#7

Another factor to consider is public-private chain interoperability is set to increase going forward, e.g. via this kind of research:

#8

I disagree completely. There are instances where that is the case, but there are real use-cases for permissioned networks which result in multi-millions in savings. Particularly in situations with many parties with minimal trust interacting.

A concerted push to delegitimatize an objective improvement because it’s not on the public chain would be a disservice. Particularlly when these permissioned chains are putting out research, and funding into public tooling.

The public chain does not have privacy at this time, and so permissioned chains are the best route to more private smart contract networks today.

#9

And we still should be evangelizing the public chain to enterprise. Enterprises take a long time to make moves typically, and as I mentioned often times when they do, refuse to leave whatever they’ve entrenched themselves in. Private chains undermine the entire philosophy of what blockchain is about, and I’m perfectly fine with delegitimizing it. “Oh you saved a couple million on a private chain? Now imagine what you could do on a real blockchain”.

Privacy on the public network has been done, EY is releasing the code for it uhh in the next week or two. So that’s an absolute talking point.

#10

I don’t disagree that EY has done a tremendous service to moving Enterprise adoption onto the public ledger, but it’s still unreleased tech, and many players have already begun making moves . Code being released “soon” isn’t something that Enterprise will wait to build on, and they will likely trickle into such solutions as they let the tech prove itself.

Enterprise Ethereum will be fairly interoperable with Public ETH in ETH2.0 and can be upgraded to share information with the public ledger. Having those transaction on a “side chain” only compliments the roadmap of ETH2.0 imo, and get’s these companies entrenched within the technology, the tooling, and the ecosystem.

If you want to push new projects onto public ledger, I’m not going to tell you not to, but let’s not create a scenario where we push EEA projects to doubt their choice in what’s available in Ethereum today.

#11

Public side chains are still a better way to move the tech forward. Thankfully it appears Consensys is also taking this mindset, with John Wolpert pushing that private consortium chains effectively can violate antitrust laws.

#12

Good discussion of this here

After watching this it made me wonder if there is a view to the next 2 years of roadmap for Ethereum that highlights the enhancements specifically for the enterprise.

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