The final panel on the last full day of Consensus 2016 featured a gentlemen’s dual of philosophies over the merits of public and private blockchains by two of the biggest names in the business.
On the one side was David Rutter, founder and CEO of distributed ledger banking consortium R3CEV, which has over 40 member banks and is working to build from the ground up a faster more transparent way for those banks to conduct a wide range of transactions. On the other sat Balaji Srinivasan, founder and CEO of 21 Inc the most heavily funded bitcoin mining company, with $121m venture capital making a wide range of plays into other areas.
The panel’s moderator, Paul Vigna, author of “The Age of Cryptocurrency” and writer at The Wall Street Journal, provided the prompt for the debate with a friendly request for the two founders to pick apart the weaknesses of each other’s strategy.
Srinivasan, who had just announced the launch of a new plan to make every computer a bitcoin mining computer took the first swipe, began by explaining what he considered the limits of a trusted blockchain or ledger network.
Citing a recent dispute regarding Alibaba, he said that the lack of trust between the US and China was evidence of exactly the dangers of over-expanding a trusted network.
Srinvasan told the audience:
“That kind of situation is something where you can only expand a private blockchain so much until you start getting into things that are in Russia or in China or in Iran or some region that is really not fully a trusted party.”
As a counter-point to his argument, he held up his own preference for the bitcoin blockchain, which because is not only distributed, but public facing, means parties can transact across wide distances without knowing anything about one another.
The former CEO of ICAP electronic broker, Rutter responded that banks don’t need such assurances because of other existing protocols that have been in place for years.
Specifically, Rutter mentioned legal documentation embedded in banking processes and regulations as evidence that a trustless system for his potential clients simply wasn’t necessary.
Rutter said:
“I think that from what we’re trying to solve for and with the institutions, we’re trying to solve it for which is global financial institutions not just banks. There’s this embedded trust.”
Unusual competitors
Though on the surface the two companies may appear to some to be competitors, the potential customers are certainly varied; 21 Inc is marketing to ambitious developers, while and R3CEV working to build products for global banks.
Another difference between the two ostensible competitors is their time to market. While Rutter admitted he’s under pressure from his members to create useful products on a tight schedule, Srinvasan said his company has lots of time before his vision needs to come to fruition.
Both seemed trying hard to play nice in spite of some difficult questions.
Srinivasan said he was previously a “bear” about private blockchains until he read Richard Gendall Brown’s recently published paper explaining R3CEV’s Corda. Rutter implied he may actually own some bitcoin, though where exactly the key was he couldn’t be sure.
Image via Pete Rizzo for CoinDesk