Speaking at the Synchronize 2018 conference in New York City on Thursday, Nick Szabo, a pioneering cryptographer who first developed the concept of smart contracts in 1996, urged the audience not to lose sight of blockchains' original promise.
"I just want to plug the benefits of trust minimization and decentralization," he said while participating in a panel on smart contracts. "The traditional banking model is 'we trust us, why don't you trust us?'" he continued, arguing that customers might not trust banks.
"They might even hate you," he added.
Szabo's remarks would have been pointed in any setting, but he was speaking to an audience made up mostly of financial services professionals. He took the stage shortly after Digital Asset CEO Blythe Masters and R3 CEO David Rutter, who promoted their respective permissioned platforms as well-suited to the financial services sector.
Szabo's fellow panelists were not as critical of enterprise blockchains. Shaul Kfir, Digital Asset's chief technology officer, said that he used to think "bitcoin is great, ethereum is great, those people in financial services probably don't know what they're doing."
"I'm much more humble today. They know what they're doing."
Helen Altshuler, Google Cloud's engineering program lead, argued in favor of "hybrid systems" that combine attributes of open and closed platforms.
Not another DAO
In addition to the open-closed debate, much of the conversation focused on the reliability of smart contracts. The DAO hack in 2016, which Chain CEO Adam Ludwin mentioned (and Masters and Rutter brought up during the earlier panel), has created the perception that smart contracts are not yet suited to large, high-volume markets.
Yet Kfir argued that the U.S. Treasury repo market – where "$100 million is a small trade" – is a use case that "lends itself very nicely" to smart contracts.
In order to tackle such use cases, the panelists agreed that smart contract developers would coalesce around a few tried and tested templates. Ludwin described this eventual standardization, saying, "yup, that's been used a million times in repo, we know it works." He continued:
"Obviously we're in that Cambrian explosion now, but over time I think it will be standardized."
Szabo argued that a change in perspective would be needed to achieve this reliability. "Web programming is an extremely bad model to bring to this," he said. "When you program a pacemaker and you install it in your heart, you want it to be bug-free."
Image by David Floyd for CoinDesk