What are private blockchains good for? Interoperability and privacy were a primary focus at the private blockchain panel at Money20/20 USA this morning. With JPMorgan represented on the panel, the topic of Jamie Dimon inevitably came up.
Also read: Money20/20 USA Gets Underway in Las Vegas
Big Names in Private Blockchains
Participants included blockchain executive director Amber Baldet of JPMorgan Chase, blockchain program manager Marley Gray of Microsoft, David Huseby of Hyperledger and R3 co-founder Todd McDonald.
All said blockchains and distributed ledger databases are gaining in popularity, although “tokens are making a comeback this year”, one said.
Where are we at, though? Are we already using blockchains in daily life without knowing it, or is this all still proof-of-concept?
“We’re getting ever closer” to that daily life point, said Baldet. We’re seeing real-life uses already though, including Digital Asset Holdings’ work with the Australian Securities Exchange.
Can Private Blockchains Talk to Each Other?
Interoperability between blockchain platforms is key, all agreed. We don’t want these different platforms to develop as silos that don’t (or can’t) talk to each other.
R3’s McDonald said he was “seeing a lot of spontaneous interoperability” already. People do see value in being able to move assets from one chain to another.
There’s value in developing standards and having consortia to examine the issue, with identity being one prominent use case for this. However interoperability “isn’t something I worry about, it doesn’t keep me up at night,” McDonald added.
Likewise, industry consortia are developing in an ad-hoc manner as value is recognized, presenting massive opportunities. Growth will be exponential after that, said Gray.
JPMorgan started its own blockchain arm after leaving the R3 consortium in April 2017. She also announced the company has also joined a new R&D organization based around blockchain development, and interoperability is a main focus.
What’s a Private Blockchain Good For?
Some of the answers were surprising here.
Huseby noted “it’s proving that something happened once, and happened at a particular time.” Traditional databases just weren’t built for this (level of proof), he said.
“Supply chain for food comes up a lot… it becomes a lot easier when you have this decentralized store of data.”
“It helps to look at where we’ve tried centralized solutions,” said Baldet. One example is the Interbank Information Network — which needs to pull settlement data together from many sources and allow for irregularities.
“Cryptocurrency!” said McDonald as his main use case, though he and Baldet added identity was “the killer app for blockchain”.
“Digital Assets and digital cash,” said Huseby, getting a positive reaction from the audience.
What About Dimon?
“Your CEO was out there disparaging this technology. Do you agree with him?” the moderator asked.
“My answer on Twitter was to shrug,” Baldet said. “There have been many conversations (about that) internally.”
We need to note there’s a distinction between Bitcoin and blockchain technology though, she said. We have to look at the asset “bitcoin” itself as something different to the wider cryptocurrency community and blockchain technology.
Corporate Privacy and Confidentiality Needs
There’s a notion that transparency only comes from the open blockchain world, said Baldet. However these systems are all anonymous or pseudonymous — or so they say. However data forensics field is developing ways to tie addresses to identities, which won’t do for big finance and corporate participants.
“It becomes dystopic very quickly,” she said. The team behind Zcash is working on zero-knowledge proofs — we’re looking at that and using the concepts to develop an entire zero-knowledge settlement layer that also protects privacy and confidentiality.
“Privacy is a hard problem to solve, this is non-trivial,” Baldet added. Private blockchains are about developing platforms that can record and prove events without necessarily identifying details to the public, like who transacted and how much.
We need to find the right balance for institutional use cases that can also be used by regular developers, she said.
Do private blockchains and distributed ledgers have beneficial use cases? Let’s hear your thoughts.
Images via Jon Southurst