Patrick Murck feels we are all getting blockchains wrong.
Speaking to CDOTrends at the recent EmTech Asia in Singapore, the special counsel, Cooley LLP, a fellow at Berkman Center for Internet & Society at Harvard University, and the former executive director of Bitcoin Foundation said that calling a permissioned distributed ledger a blockchain does a "disservice" to people who do such systems.
“[Permissioned distributed ledgers] aren’t blockchains by any definition that I use. But the technology is interesting and will have a huge potential impact on how traditional financial markets will operate,” he added.
Why a disservice? Murck noted that using the word “blockchain” often blurs the issue and brings in a lot of other concerns around public open systems. “They certainly confuse the conversation with regulators, for example.”
However, Murck is supportive of permissioned distributed ledgers using lessons and technologies from the permissionless blockchains like bitcoins for streamlining closed and more traditional systems. “But they are two very distinct [systems].”
"Blockchain is a convenient word in the permissioned world. You say blockchain to get everyone to sit around the table, and then you come up with standards. It then becomes a different conversation," Murck added.
Boom or bust?
Murck remained bullish about the future of permissionless blockchain implementations like bitcoins. He feels that the technology is not thoroughly tested yet.
“This is my fourth bubble burst and crash. It is a trend which is very cyclical: you have a big run-up, and then you have a long ‘crypto winter.' But at the same time, the community gets bigger and more diverse after each crash. That is a great thing because it builds the future,” Murck observed.
While valuations have tanked and many feel that cryptocurrencies are dangerously close to an all-out crash, Murck thought that the market is getting ahead of itself.
“Remember, even though we have been running bitcoins for ten years we still do not know that there will not be some sort of issue in the technology that can render it useless. So, it is an incredibly high-risk space,” he said.
However, Murck was quick to point out that the bitcoin network is maturing fast. He pointed to a growing community that is getting more diverse, more research projects, and regulators getting a better handle on its inner workings as positive signs.
“As in most cases, the growth is not linear. And we are very early in the story on this,” he said, adding that the price concerns are a “total distraction.”
Murck also saw hard forks a feature of open source. He noted that these were already part of the development of Linux, where each "fork" led to a different Linux distribution.
“It is also a great release valve for the dissatisfied members of the community [at bitcoin]. If you can do it better and people like it, more people will join your network. In reality, it has not happened [for bitcoins],” he said.
So, with ethereum and other alternative networks gaining mindshare, what does the future hold for bitcoin?
The pragmatic Murck noted that it is too early to say.
“Right now, we are seeing a lot of infrastructure being built for digital marketplaces. These could not have existed before because the cost of administrating them and creating them was too high," said Murck, who pointed to marketplaces for micro-bandwidth trading and decentralized file storage as excellent examples.
However, the future is still unclear. Cryptocurrencies and tokens are generally taking two routes. One is the bundled route that is favored by ethereum, which “offers stake and computation,” and EOS, which also adds “storage” to the technology stack. Bitcoin, which only offers “stake”, offers a secondary route that sees developers creating “layers on top of the network.”
“It is just two different models, but no one will know which way the future will go.”