The Clash of Ideas at the 2016 Consensus Conference

Rage Comment : Despite the analysis of experts, there has been no definite result in the debate between public and private blockchains. Some people have always stood on their own positions, while others have said that private chains are simply extensions of public chains. The 2016 Consensus Conference became the main battlefield of this debate. David Rutter, CEO and founder of the R3CEV Alliance, and Balaji Srinivasan, CEO and founder of 21Inc, had a fierce debate on their respective views. However, judging from the current global technology research and development situation, it is still difficult to see which one is better. Moreover, judging from the customer base and product launch time of these two companies, there should be no competitive relationship. Therefore, it can only be said that this fierce debate represents the unsolved mystery of the entire blockchain field.

Translation: Annie_Xu

In the final panel session on the second day of the Consensus 2016 conference, two industry heavyweights clashed over the benefits of public and private blockchains.

The debate was between David Rutter, CEO and founder of R3CEV, a consortium dedicated to developing transparent transaction channels for banks on a large scale, and Balaji Srinivasan, CEO and founder of 21Inc, a bitcoin mining company that received the highest amount of funding at $121 million.

The panel moderator, Paul Vigna, author of “The Age of Cryptocurrency” and a contributor to The Wall Street Journal, initiated the fascinating exchange of ideas by friendly asking the two founders to point out the flaws in each other’s corporate strategy.

Srinivasan, who just announced his plan to turn every computer into a bitcoin computer, began by pointing out the flaws in how a trusted blockchain or ledger works.

Citing the recent controversy surrounding Alibaba, he said the lack of trust between China and the United States is a testament to the dangers of over-extending trusted networks.

“In this case, private blockchains can only be expanded if they start to participate in the affairs of regions where they are not fully trusted, such as Russia, China, and Iran.”

To prove his point, he cited his preference for the Bitcoin blockchain as an example; because the Bitcoin blockchain is not only distributed, but also public, which means that the trading parties can conduct transactions across large regions without knowing each other.

David Rutter

Rutter, former chief executive of brokerage ICAP, argued that banks did not need such insurance because they had existing partnership agreements.

He highlighted that legal documents embedded in banking processes and regulations prove that potential customers do not need to trust the system.

“I think in terms of the problems we want institutions to solve and try to solve for institutions, our clients are global financial institutions, not just banks. There is an embedded trust mechanism.”

Unusual competitors

While the two companies appear to be competitors on the surface, their potential customer bases are very different; 21Inc markets to ambitious developers, while R3CEV develops products for global banks.

Another significant difference between the two ostensible competitors is the time it takes to bring their products to market. While Rutter admits that his colleagues put him under considerable pressure to develop a practical product quickly, Srinvasan says the company still has plenty of time before his idea is realized.

Although both sides asked various difficult questions, they tried to be friendly.

Srinivasan said he was not optimistic about private blockchains until he read Richard Gendall Brown’s article about R3CEV’s Corda project; Rutter hinted that he might try to get some Bitcoin, but he is not sure yet.