Blockchains that are established and governed by corporations are destined to fail, as users are unlikely to embrace a chain dominated by a central authority, according to Eli Ben-Sasson, co-founder and CEO of the blockchain company StarkWare.
In a post on X on Monday, Ben-Sasson asserted his belief that “corporate” chains will not endure because they contradict the essential principle of blockchain, which necessitates the elimination of a central entity.
“The key aspect of blockchain is a system that removes a central entity. This comes with challenges: It involves a highly complex technology that is difficult to construct and navigate. Even with account abstraction (AA) to create a simplified user experience, the underlying technology remains intricate,” he noted, referencing a technique designed to spare users from managing traditional private keys.
Bitcoin, the inaugural cryptocurrency, was created to challenge traditional financial institutions and restore financial authority to individuals.
This may explain the skepticism among certain members of the crypto community regarding new blockchains like Stripe’s recently launched layer-1, Tempo.
Corporations will retreat if user adoption is low
Ultimately, Ben-Sasson indicated that it is beneficial for corporations to embrace blockchain technology because it signifies that “blockchains are no longer viewed as a daunting concept.”
In response to a question from a user on X, he also acknowledged that, in the short term, chains controlled by major financial institutions could facilitate mainstream adoption.
However, he forecasts that within a few years, blockchains developed by these corporations are likely to be forsaken when they “become too cumbersome from a technical perspective,” and users choose to steer clear of them due to their lack of appeal from a “DeFi/self-custody/control-my-assets standpoint.”
“Fast forward a few years: Corporate chains will be burdened with complex technology but fail to offer the added value to users, specifically the absence of a central entity overseeing them. At that juncture, these chains will lose corporate interest.”
Community divided on the future of corporate blockchains
Meanwhile, an X user by the name of Boluson contended that most corporations do not genuinely require a blockchain; they are simply feeling pressured to adopt the technology out of fear of being left behind.
Related: How Bitcoin’s three pillars are about to fix money — StarkWare CEO
“Not every initiative in crypto necessitates a blockchain; currently, everyone appears eager to construct something that revolves around creating a blockchain,” they remarked.
Rob Masiello, CEO of Sova Labs — a company dedicated to developing Bitcoin-native infrastructure — stated that he believes “corporate chains” will prove beneficial and functional for the companies that manage them.
“However, users will lack any method to partake in their benefits. Base exemplifies this,” he commented.
Other users speculated that corporations may initiate blockchains but subsequently transfer control to native firms or consider acquiring existing blockchains to scale them for specific purposes.
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