Corporate Blockchains Are Doomed Because They Don’t Align With Crypto’s Ethos: Starkware CEO
Blockchains that are built and controlled by corporations won’t last because they are not aligned with the fundamental concepts of blockchain, according to StarkWare co-founder and CEO Eli Ben-Sasson.
In a recent post on X, he reiterated his negative outlook for what he refers to as “corpo chains” that deviate from one of blockchain’s core purposes: to remove the need for a “central entity.”
Bitcoin Designed To Remove Middlemen From Transactions
The first truly decentralized blockchain to enter the public arena was the Bitcoin network, which was launched in January 2009 by its pseudonymous creator Satoshi Nakamoto.
It was created to serve as a purely peer-to-peer version of electronic cash that enables online payments to be sent directly from one party to another without having to first go through a financial institution.
Abstract from the Bitcoin whitepaper (Source: Bitcoin.org)
With it, Nakamoto hoped to create an asset that was autonomous, decentralized and that was not susceptible to the greed or will of any one individual. The network’s creator also wanted Bitcoin to be trustless, immutable, and censorship-resistant.
To remove the need for a third party to verify and process transactions, the network uses what is called a Proof-of-Work mechanism to achieve overall consensus.
Large Corporations Help With Blockchain Adoption
Ben-Sasson said many firms have either started exploring blockchain technology or have already entered the space, especially in the area of payments.
Among them is the payments giant Stripe, which is reportedly developing its own payments-focused blockchain called Tempo.
Meanwhile, the inter-bank messaging network SWIFT has announced that it will add a blockchain-based shared ledger to its infrastructure. This ledger is being built with more than 30 global banks and with the Ethereum ecosystem developer, Consensys.
There have also been blockchain-related moves by other traditional finance firms such as JPMorgan, BNY Mellon, and multiple others.
The StarkWare co-founder said that those firms working on their own blockchains or solutions on the blockchain “is great,” adding that “it means blockchains are no longer this scary thing anymore.”
At the same time, he added, the are not aligned with the core principle of getting rid of their position as a centralized entity.
In a few years, he added, the “corpo chains” will have the “complex” tech that makes blockchain so powerful, but without the “added value for users” of a “central entity to control them.”
At this point, he believes that corporates will shift their focus away from blockchain technology to something else.
Crypto Twitter Weighs In
One X user who commented on Ben-Sasson’s post said firms feel pressured to adopt the technology due to fears of getting left behind.
Another X user said institutions adopting blockchain will continue to use the tech because they want functionality that is fast and cheap.
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