Michael Casey brought up an excellent question in his piece on Monday in which he examined the World Bank Blockchain. Should we, as Blockchain professionals and investors, be so quick to write off private blockchains as being against the founding principles of the space?
At face value, the answer seems to be no, almost simply due to the fact that private blockchains still indicate business trust in and willingness to adopt the technology. Adding credence to this is the fact that in many cases, starting a private blockchain goes hand in hand with a huge upfront investment.
Casey suggests in the same article that while we are experiencing a market that appears to be full of failures, we can learn from certain successes, such what was recently displayed by the World Bank with their successful trial of issuing bonds via their proprietary Blockchain.
Due to the fact that this example and any others that involve private blockchains are by nature centralized, we cannot call them wins for the original ideology that the Bitcoin maximalists espouse.
On the other hand, settling any transaction in real time on the Blockchain lends more evidence to the idea that any organization that sits in between financial institutions such as clearing houses are swiftly becoming obsolete.
Going back to the example of the World Bank Blockchain, we can see a real-time example of why this is true.
On August 23, they were able to issue the equivalent of $79 million in bonds through the Commonwealth Bank of Australia, without the assistance of any middleman. On top of this, according to Casey and Coindesk, the entire process showed that similar transactions could eventually be reduced down to seconds, thanks to the Blockchain.
Imagine the efficiency that could eventually sweep the financial industry if such practices were to become standard.
All in all, despite private blockchains being centralized, consider these benefits before completely writing them off as being unimportant to the growth of the overall industry.
By: BGN Editorial Staff