The comparison between blockchain technology and the early days of the Internet is one that is perennially made in articles and at industry conferences, but is it accurate or even helpful?
This was the question posed to Cristina Dolan, co-founder and COO of InsureX, and Adrian Patten, the co-founder and chairman of Cobalt, at the Forex Network Chicago conference.
“The Internet was a lot easier to deal with because it was a linear process: you had a database, there were users, you had a web interface and although you were still training people how to use the web interface, you could control that whole ecosystem that you put up, you just had to drive people to the page,” said Dolan.
She added: “So you could think that through on the back of an envelope and create something. These [blockchain] ecosystems that we’re talking about, it’s not like you take out an existing infrastructure and completely rip it out and replace it with blockchain…it’s a uniquely complex environment because it has so many layers to it.”
The other point made by Dolan is that building a blockchain-based system is far more expensive than creating a website during the dotcom boom, and therefore if it isn’t done correctly, it can eat up a lot of a firm’s resources.
Patten contended that the development of the two technologies is different because a big driver of the dotcom boom was getting the general populace access to decent Internet connectivity. He added that within financial services the thinking around blockchain and how it can be used is still too traditional and that, as a result, a lot of the “fun stuff” around using this technology is likely to be developed elsewhere.
He continued: “We as a society have a fundamental problem with data integrity and how it is used, and technology and mathematics is the answer for this. But I don’t think that it’s going to be on the back of Ethereum or Bitcoin. There are some very clever people in this space and the clever ones I think are going to be outside of trying to make Ethereum do an extra 100 trades per second.”