The challenge was laid. Hands were shaken. The bet was placed.
Or so it appeared anyway.
At CoinDesk’s Consensus 2018 conference this year, Joseph Lubin, founder of Ethereum company Consensys, agreed to wager “any amount of bitcoin” with Jimmy Song of Blockchain Capital that within five years, the blockchain would have a number of working applications serving real users.
That’s probably a bet worth taking. Hundreds of millions of dollars have already been invested by some of the world’s biggest companies on the future of the blockchain.
JPMorgan has a blockchain program. Barclays’ Accelerator, a 13-week program for startups organized by one of the world’s biggest banks, has provided space and funding for a number of blockchain-based fintechcompanies. Businesses working on blockchain-based services include IBM, which is trying to build a tracking tool for shipping companies and retail chains, Eastman Kodak, which is experimenting with the blockchain to create repositories for stock images, and Spotify which wants to use the blockchain to manage copyrights. Investors in blockchain projects include Peter Thiel, Sequoia Capital and Andreessen Horowitz, as well as Google, Goldman Sachs, Visa and Deloitte. All of those companies and experts are betting millions of dollars that a decentralized ledger can do things that other forms of technology just cannot.
They’re likely to be wasting their money and their time … but not all of it.
Critics like Song tend to argue that much of what blockchain-based products are trying to do can be done without the use of a blockchain. A decentralized ledger might be able to help keep track of items flowing through a shared economy, such as apartments, boats and bicycles, but companies like Airbnb, Uber and city bike schemes have all done fine with little more than apps and barcodes. Triple-signed receipts are much easier to implement and meet the same security guarantees as a decentralized ledger with public key cryptography, proof-of-work, networking and database technology. A blockchain can replace escrow services, but would it be cheaper, more secure or easier to use than a bank account and a trusted third party?
Using the blockchain can also remove the versatility that makes startups so agile. New firms in Silicon Valley work long hours to shoot out minimum viable products before their seed funding ends. They refine those products, match them to audiences and show venture capitalists that they’re on the right track — that they can actually make something that people will pay to use — in order to win enough money to reach the next milestone.