Matthew Spoke is CEO and founder of enterprise blockchain startup Nuco. He is a bitcoin and ethereum enthusiast, who has previously worked with Deloitte with the aim of advancing the use of smart distributed protocols.
In this opinion piece, Spoke looks at moves by tech industry incumbents to capture the emerging blockchain market, and offers a warning for the eventuality that they succeed.
There's a seemingly obvious marriage happening right now between two incredibly important Internet technologies, one that promised to make web businesses more scalable and organizations more efficient (which has happened to a large extent), as well as holding decentralization and disintermediation as the ultimate objective (on which the jury is still out).
Earlier this year, I wrote a piece about the "Race Towards Irrelevance" that seemed to be taking place among traditional organizations whose markets and business models stand to lose from the adoption of decentralized systems. Primarily, I was referring to some intermediary companies in the financial services industry who will struggle to redefine their value propositions as blockchains become more commonplace.
What I failed to include in my prior ramblings was that it's not only traditional industries and businesses who face this risk. S
imilar to the attention and investment that has poured into the "blockchain industry" from financial services firms, there are a number of global scale technology vendors positioning themselves to dominate this market – or, to a skeptic, centralize it.
I’m referring to "the cloud" and "the blockchain", two terms which should more accurately be used in the plural sense.
Decentralization is key
I’m not suggesting that cloud computing is not well suited to underlie blockchain infrastructures.
On the contrary, in many cases, there’s an obvious match that allows for efficient scalability, robust node security and light weight onboarding, among other benefits. But (and this is a big but) these benefits quickly become irrelevant if we forget about the need for appropriate decentralization.
Naturally, it’s no surprise that the same companies who, to a large extent, brought us the mainframe and the PC, want a piece of the blockchain action. It’s also no surprise that these same companies are already in the process of capturing large parts of the emerging blockchain market.
As the old adage goes: "nobody ever got fired for buying [insert big tech company here]."
Word of caution
In general, I think the entrance of big tech companies into this domain has had a positive impact.
For one, it has helped bring much needed credibility and reaffirm the importance of these new technologies. That said, as markets consider their adoption, we should encourage an objective analysis as to the appropriate implementation of this technology so as to achieve its intended outcome.
Although there are many reasons to trust the competency of prominent technology vendors and the integrity of their systems, which have been proven for decades in other domains, let’s keep in mind that the intended purpose of this paradigm shift is to eliminate the need for trust.
Objectively, this means that a blockchain cannot be dependent on a single vendor’s infrastructure or security.