There is a lot of debate these days about public and private blockchain platforms that assumes a zero-sum game, one will win and own the market and the other will lose and be forgotten forever. Public and private blockchains are frequently compared to the public and private internet, ultimately arguing that it is the public open internet that shapes the world today and not the siloed internal intranets. This perspective is wrong mostly because it underestimates how impactful blockchain technology will likely be. Bill Gates famously claimed that “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten”. The truth is both public and private blockchains have important benefits, and they each have a sustainable future.
I heard recently a suggestion that blockchain systems will be 1000 times the size of today’s internet. Even if that estimate is off by a factor of ten, 100 times is still a massive scale! If this is true, we need to think of a bigger comparison. I propose that blockchain is analogous to something much larger, possibly computing itself.
Consider two very different models of computing: general purpose computation and embedded systems. General purpose computing is probably what you think of when you think about a computer. A thing with a screen that can do all the things that are generally possible to do with computers: message friends, read this article or order an Uber. Embedded systems are specialized computers made to do one thing, and one thing very well. You can’t install a general-purpose operating system like Windows, OSX, Android or IOS on them and run your favorite applications, yet they are used everywhere. They enable traffic light systems, airplane navigation modules, MRI imaging equipment, even microwaves and dishwashers. By design, these systems are secure, reliable, robust and built for a narrow set of purposes.
If public blockchains are like general purpose computers, it’s safe to say that mass adoption will arrive along with a flourishing ecosystem of applications and open protocols for development communities. Public blockchains may also become the primary blockchain we engage with as retail users, very much like the general computers of today. In this scenario, applications for utility tokens (think loyalty points), royalties for music streaming services, advertising on social media and self-sovereign identities are just a few things ripe for disruption by open public blockchain platforms.
At the same time, private blockchains, like embedded systems, will likely be used anywhere robust, scalable, fit for purpose systems are needed. Systems that underpin currencies, payments, capital markets, supply chains, telecommunication infrastructure, national defense, transportation, medical operations and pharmaceuticals are just a few things that private blockchains bring promise to.
In practice, the use case always determines the functionality, requirements, and implementation of the technology. The most important thing we can do is increase the awareness of the tools we have, understand what they are good and bad for, learn how they can interoperate and define how they should be governed. Positioning public and private blockchains as a zero-sum game underestimates their significance and grossly simplifies their applications to a one size fits all model. So let’s stop pointlessly debating, and focus on building the future of blockchain applications together.