It would not be a new idea to say that blockchain is one of the most important developments in the past decade. But there’s a lot of different ways to believe in blockchain; many simply imagine cryptocurrency but there’s much more to it than that. While cryptocurrency is at the heart of this question, there’s a lot more nuance to appreciate.
There’s a matrix I like to use when we talk about who and what will use a blockchain and for what purpose:
- Pro-crypto, and pro-blockchain. These are most people who learn about it.
- Pro-crypto, anti-blockchain. These are people who maybe think crypto is interesting, but that blockchain doesn’t solve meaningful business problems.
- Anti-crypto, pro-blockchain. These are banks and other regulated entities.
Anti-crypto, anti-blockchain. These are people like Peter Schiff, who don’t like blockchain altogether.
The vast majority of people reading this are probably in the top-right square. They like cryptocurrencies, and they think that there are interesting problems to be solved by blockchain in the future as well. Most individuals who learn about blockchain like the fact that blockchains have some very interesting properties. They’re anonymous, they’re on all the time, they’re censorship-resistant and transactions are immutable. Now, these things are true, but it’s important to understand the limitations of how true they are. For example, it’s been widely shown that crypto wallets are not actually that anonymous. It’s somewhat easy to find who owns a particular Bitcoin wallet.
There’s a more important lesson to understand here that’s not about crypto. It’s about different people who have different constraints on what they want the blockchain for. Some users want privacy, which brings them to things like Monero. Others want scalability, which has them moving to layer two solutions.
Corda is one of the few projects that exist in the bottom right of this graph.t represents a very different kind of tool that a normal public blockchain can’t solve. We’re not anti-crypto, but we’re focused on building a product that can bring the benefits of the blockchain to regulated industries that can’t use public blockchain for one reason or another. Banks can’t just take their client’s data and give it out to every single computer in the world on a smart contract. It’s just not going to happen.
The truth is that public smart contracts are not right for everyone. Corda gives an entity the ability to trade anonymity for privacy and scale. Corda nodes can handle thousands of transactions per second, without broadcasting them to the entire network. A group of regulated entities can enjoy the benefits of blockchain just like anyone else, but they don’t benefit from anonymity. There are plenty of blockchain use cases we’ve talked about on this blog in healthcare, insurance, telecom, and finance.
As for the future? It seems like the lines are going to start to blur between what’s a private and what’s a public blockchain. As the regulated industry starts to meld with the unregulated industry, eventually some really interesting new use cases and liquidity will be unlocked for everyone involved.
Happy coding ~
If you’re curious for some instances where completely decentralized blockchains might not be ideal, here are some examples where sometimes a regulated blockchain can fill a unique niche: