Ripple Labs CTO changes attitude towards blockchain technology

Ripple Labs CTO Stefan Thomas has vigorously promoted the development of the Bitcoin community. However, many problems have arisen in the development and application of the underlying blockchain technology. The DAO project, the exchange ShapeShift, and Bitfinex were hacked; the Ethereum blockchain executed a hard fork; all of which highlight the demanding consensus in this field and the frustration of not being able to achieve it. Thomas believes that blockchain can only be widely used if it is as flexible as the Internet.

Translation: Annie_Xu

Stefan Thomas, the man who helped attract millions of people to bitcoin, is starting to waver.

His paper, “The Subtle Tyranny of Blockchain,” states that the ledger software that supports digital currencies, blockchain, is too rigid to be widely used. Supporters of blockchain technology believe that it can transform many industries, including finance, foreign trade, and healthcare. However, as technology pioneers introduce it into new areas, they must make adjustments; this requires consensus among many software developers and miners who build the Bitcoin network.

Thomas, CTO of Ripple Labs, wrote:

"Working in blockchain is really painful. Consensus and harmony are important; but extreme harmony can become an obstacle. Just like the utopia in the Lego Movie, everything is only glamorous on the surface. Behind this is a world of huge differences and rapid changes; this deviates from the existing consensus."

The paper also includes illustrations of the authoritarian business president in the movie.

This is unlike Thomas, who five years ago helped simplify bitcoin adoption with his website weusecoins.com, which bills itself as “the only source of information about bitcoin for the average non-technical user.” It also serves as a warning to startups looking to bring blockchain to the masses.

Stefan Thomas

Industries ranging from finance to healthcare to utilities are investigating blockchain technology, such as Ethereum’s, in hopes of fundamentally changing how payments are tracked, securities and derivatives trades are processed, and medical data is stored, to name just a few of the many potential applications.

In the financial field, gathering everyone in the market into a database and using pre-uploaded securities and cash for payment can greatly speed up transaction execution, clearing and settlement.

However, there are many obstacles in the implementation process. For example, getting Wall Street companies to trust each other and coordinate cooperation in the same network. Thomas also mentioned another obstacle: the testing and improvement of software in blockchain systems is hindered because the majority of miners using the software must first agree to upgrade.

The DAO hack

What is certain is that consensus is possible. After the DAO (Distributed Autonomous Organization) was hacked, millions of dollars in ether were lost; enough Ethereum users decided to upgrade the network to restore everything to the way it was before the theft. However, this decision also angered blockchain users, who believe that the immutability of blockchain is the most powerful feature. Thomas supports a system like the Internet, where anyone can make changes; once these changes are proven to be useful, they will be widely adopted. "The fact that a piece of the system can be upgraded and good ideas can be applied to the system is a necessary factor to support the continuous technological innovation of the Internet," he said.

Wall Street firms are looking to blockchain as a way to cut costs and improve efficiency as they face tighter regulatory requirements since the financial crisis of 2008. Thomas' San Francisco-based company, Ripple, already uses a distributed ledger system to allow consumers to send international money in minutes instead of days.

Since 2011, Thomas's video "What is Bitcoin" on YouTube has received 68 million views. But now he has decided to give up blockchain, but of course he has not given up on digital currencies such as Bitcoin.

He said:

"Participants in blockchains such as Ethereum should also think this way." Finally, he mentioned Ripple's Interledger Protocol, believing that it is a more flexible and personalized payment method. He said that with this important option, our thoughts once again belong to ourselves. "