The Economist magazine published an issue on October 31 with a cover story on Bitcoin and blockchain technology. Later, the weekly magazine also released a video of a Bitcoin blockchain panel discussion through its YouTube channel.巴里•希尔伯特, founder of SecondMarket and CEO of DCG, was also on the panel, where he expressed his support for Bitcoin blockchain and opposed banks and FinTech startups to privatize blockchain. When Silbert was asked about his views on private blockchains, he said he had no good feelings about private blockchains.

In addition to supervision, banks should also be involved

Barry Silbert was rather blunt when he first discussed the concept of a permissioned blockchain authorized by banks. He said:

“I think they will fail, and the people working on private blockchain projects will eventually leave the banks and go work for startups that are working on public blockchains.”

To put this into context, Hilbert pointed to the current lack of financial regulation and interbank cooperation as reasons why the blockchain concept is difficult to realize:

“The bottom line is that it’s very difficult to drive innovation in banks under current regulation. Just getting two banks together — let alone 10 or 20 banks in a room — I mean, it makes me dizzy just thinking about how to set up that meeting.”

Banks are slow to innovate

It takes several years for banks to launch new products or services, even if the complexity of these products or services is much lower than that of blockchain. In Silbert's view, banks' inability to quickly integrate resources will give Bitcoin security and scalability issues time to be resolved. He explained:

“Banks are talking a lot about improving the efficiency of their systems, and they are very interested in blockchain technology, but anyone who has worked in the banking system can tell you that it takes two years to deploy a basic system. Therefore, it will take another 5 to 10 years before we see banks turn their efforts into reality, that is, into products that can be actually used. But when the banks get these, I believe that the Bitcoin blockchain will have solved many of the problems mentioned before about security and scalability. In the end, it will trigger innovation, but these innovations will happen outside the banks, and what the banks can do is to adopt this innovation.”

It’s a good thing that banks are interested in blockchain technology

Although Hilbert is not optimistic about banks building their own blockchains, he is happy to see banks and other financial institutions exploring blockchain technology, and he also made positive comments on this. He pointed out:

“I think what the banks are doing now is commendable. Over the past year, more and more people have changed their views on Bitcoin from “tulip bubble or Ponzi scheme” to admitting that it is a very powerful technology, which is gratifying. But if we look at the history of technology adopted by Wall Street, we can know that technological innovation does not come from Wall Street banks.”

Many other notable Bitcoin entrepreneurs and investors, such as XAPO CEO  文斯.卡萨雷斯and ShapeShift CEO  埃里克•沃里斯discusses that a permissioned private blockchain is at best a private database, a technology that has been around for years.

As almost all the world's major banks begin to consider how to use blockchain technology to reduce transaction costs and improve financial services, the question of whether blockchain should be authorized will also be resolved in due course. However, Bitcoin blockchain is still dominant at present.

Original article: http://coinjournal.net/barry-silbert-on-why-private-permissioned-blockchains-will-fail/
By Kyle Torpey
Translator: Orange
Reward address: 1FCiRAuQYUqMzyy7XHueLs5SCRzd11P6kj
Editor: printemps
Source (translation): Babbitt Information