Decentralized or Nothing
Article originally posted here by coindesk
by Brady Dale
More or less decentralized? For Jimmy Song, there’s no in between.
An author and Bitcoin Fellow at venture firm Blockchain Capital, Song made that point repeatedly in a debate with IBM engineer and Hyperledger Fabric co-lead Chris Ferris at SXSW Thursday, where he told the crowd at the Hilton Austin in no uncertain terms: “You either have control over your stuff or you don’t. It’s a zero or a one.”
The debate pitted permissioned blockchains – the private networks being pitched to big business – against permissionless blockchains – the technology undergirding bitcoin and other open-source networks. Billed as a “deathmatch” on the festival agenda, Song was determined to give the audience what they came for.
“Why do you need permission if it’s supposed to be decentralized?” he asked. “There has to be an entity that’s giving you permission, and that’s by definition centralized.”
While Song took the binary view of decentralization, Ferris argued that blockchains can exist on a spectrum. Sure, permissioned blockchains are less decentralized, Ferris said, but their added trust mechanisms mitigate perceived risk.
“Permissionless blockchains do not necessarily solve the problem of trust,” he added.
Song wasn’t having it. To illustrate the degree to which he was willing to extend his point, Song used the example of the ethereum fork following the infamous hack of The DAO, when the project’s developers and users agreed to introduce a code update aimed at rolling back the stolen funds.
“I think Ethereum is a permissioned blockchain,” Song said, adding:
“When Vitalik says, ‘These particular transactions aren’t particularly good for the ecosystem so we’re going to roll them back,’ that, to me, is a permissioned blockchain.”
On stage and in conversation with CoinDesk beforehand, Song argued that every application of blockchain to anything but bitcoin is a waste. “Blockchain is really useful for bitcoin,” he said during the debate. “Everything else has a central point of failure.”
Prior to the debate, Ferris told CoinDesk that he hoped he could make the point that there’s just different use cases for different kinds of blockchains, and those use cases should determine what level of decentralization should be called for.
“Certainly part of the conversation will be that bitcoin doesn’t solve the same problems we are trying to solve in an enterprise context,” Ferris told CoinDesk.
IBM, he explained, is primarily building products that allow large enterprise partners to share information rather than exchange money. For example, today Big Blue announced a deal to record information about businesses’ legal status across France. Trying to find some common ground, Ferris argued there’s space for the approaches of both sides.
“I think there are a ton of use cases where permissioned blockchains make a ton of sense,” Ferris said. “I also think there’s a ton of use cases where a permissioned blockchain doesn’t make any sense.”
But Song didn’t come to accept concessions. He said all the blockchains besides bitcoin’s might as well just run on a faster, cheaper centralized database.
“A permissioned blockchain is an oxymoron because it’s a centralized database that’s masquerading as something decentralized,” Song said.
[Photo by André François McKenzie on Unsplash]