How I Lost My Faith in Private Blockchains

What this led to is a shift to advising clients to leverage technology better suited to their problems, and a greater a focus on public blockchains and crypto assets.

The challenges I found in applying permissioned blockchains in industry came down to the following: definition, differentiation, process impact, and necessity.

The difficulty in describing the challenges with permissioned blockchains begins with the difficulty of defining what it is.

Typically, discussions around blockchains talk about consensus and reconciliations, due to the original permissioned blockchains that were forks of bitcoin or ethereum being used in a private manner.

The term "Distributed ledger technology" emerged, which people would put in the same bucket as blockchains.

There is one key difference between the two technologies that we've included in our definition: blockchains are specifically designed to prevent central governance.

To make changes to a blockchain, new blockchain software would need to be created and distributed to all participants who would need to install over their current version.

Putting aside the obvious risks of attempting to predict the future, the trouble with this logic is that it assumes that "Blockchain" is one big nebulous technology, and that moving to a blockchain is the key component, rather than what that future actually looks like and adjusting your product to fit that future.

When stage three is reached, there is now a trusted central party that will define the rules of the blockchain and define how updates are made and distributed, and all interested parties will accept the outputs of that trusted party.

In the meantime, institutions and individuals should be evaluating permissioned blockchains like any other technology: it isn't magic, and it should be assessed like one would assess any other.