Chapter 1: About BHB Network, Bitcoin, Private Blockchains, Ethereum, ICOs
About 3 years ago I founded a project with some bitcoiner friends, now called BHB Network (formerly “Blockchainlab”). Our goal was, and still is, to create a bridge between businesses and research in the context of the Bitcoin protocol.
On one hand, the project is aimed at helping, accelerating and assisting research and development activities on Bitcoin, in a completely free and open source fashion, honestly exposing all its disruptive potential, without any limits or censorship whatsoever. On the other hand, the project is aimed at helping business to create a profit (or to limit the losses) from this revolution, in a way that make sense and isn’t just a set of random buzzwords used for marketing reasons.
BHB, in its nonprofit research foundation hat, helped the development of many Bitcoin-related projects, and it’s going to do so even more heavily in the near future. BHB, in its for-profit consultancy company hat, helped many businesses to save money and time, by avoiding to get into various technical dead-ends (“private blockchains”, DLTs, Ethereum dapps, appcoins, sci-fi “blockchain” projects and platforms). I use to call this dead-ends “scams”, privately and publicly, even if I admit that the abuse of this term is a typical “bitcoiner” habit, more than a precise fraud allegation.
When our clients in the banking sector ask us to use projects like Corda or Fabric in order to “create their private blockchains” for internal use, we are paid to explain them that their expectations are wrong. Nothing to be ashamed of: division of labour is important, nobody knows everything, especially about innovative and exotic industries, and our project exists for this exact reason. We tell them that they should pursue serious, sound technical goals instead, such as time-stamping their databases on Bitcoin for compliance, or providing secure Bitcoin custodian accounts for their clients.
This type of advise is often completely accepted, and the clients pivot to the realistic use cases we suggest. Sometimes it’s partially accepted, and they just abandon the idea of using “the blockchain” at all (still a success, sometimes doing nothing is better than doing pointless stuff). Sometimes, even more interestingly, they opt to put in “competition” two different visions, ours and the opposite one. From their point of view this totally makes sense: the definition of “blockchain experts” is often self-referential and circular, and business people don’t have an easy life distinguishing between true experts and phonies, without having to become technical experts themselves first (therefore eliminating the division of labour, the foundation of our civilization). A “bitcoin maximalist” tells them one thing and, with the same exact self-confidence, Richard Brown and/or Vitalik Buterin tells the exact opposite! Who are they supposed to listen to? It’s just rational to hedge over different scenarios, to put different (strong) opinions in direct competition, to challenge the “experts” with their opposing and incompatible visions.
Our client Intesa Sanpaolo bank, for example, publicly announced that they are following two separate “blockchain” strategies: the one suggested by us (Bitcoin-based, permissionless-oriented), and the one suggested by the company R3CEV (“private blockchains” and similar things). They totally understand the fact that the two consultancy companies that they are working with have two opposite recipes, in clear and open contradiction, but they still invest in both approaches, hedging their position against the possible outcomes.
So: we take money from banks, but this doesn’t mean, obviously, that we approve, from a technological or strategic standpoint, every single other investment they make, including the ones in projects we consider pointless or naive. And we say that loud, and we argument our position as part of our job.
The exact same thing happens when, instead of a financial institution, our client is a private firm that interacts with retail customers. From this kind of clients we recently received hundreds of consultancy requests related to Ethereum’s “Dapps” and, of course, ERC20 based “appcoins” sold in ICOs.
We answer to them exactly what we think is true. That Ethereum is not a sufficiently secure and scalable platform to be used in production. That its characteristics in terms of weak censorship-resistance and lack of privacy make it useless as a blockchain (a node.js webapp would be way better). And we also explain that the ICO model as it has been used so far, while interesting and maybe promising, is mostly just “scam” for various motivations.
Sometimes even this kind of clients, just like banks, listen to our objections to the mainstream model, and they allow us to “challenge” it with alternative implementations and concepts that we consider more reasonable, sustainable, scalable, privacy-compliant, transparent and secure. We are well aware that part of the money for this kind of job may come from revenues that are connected with activities we don’t like (Ethereum dapps development, token sales, ecc.), just like we are well aware that part of the payments we receive from banks come from economical activities we don’t like (legal-tender fiat money, government bonds, bail-outs, monetary manipulations, ecc). We don’t think that extends to our consultancy: we respond for what we do and for what we say.
I’ve never, ever said anything different, in any circumstance, social circle, language. My private and professional opinion about “private blockchains”, Ethereum, ICOs and other “scams” has always been the same, repeated consistently (and loudly) everywhere.