Andreas Antonopoulos' Folly On Private Blockchains
Blockchain Technology

Andreas Antonopoulos’ Folly On Private Blockchains


Editor’s Note: The following article is the opinion of the writer. It has started debate along with both positive and negative reactions. All voices should be heard and acknowledged.

Andreas Antonopoulos and others are perpetuating a misconception about the nature of power by advancing the notion that the most monied institutions on the planet won’t crack the code for their own blockchain-based systems. Antonopolous claims that, if a blockchain is not an “open” — or public — blockchain, then it “ain’t worth shit.”

Also read: Andreas Antonopoulos Makes Bold Prediction on Bitcoin Consensus

Antonopoulos: ‘If it ain’t open, it ain’t worth shit”

R3 AntonopoulosTell that to the people investing millions, likely soon to be billions, in just that.

The question Antonopoulos brings up has little to do with distributed ledger tech, blockchain or bitcoin, but rather the way in which power works in our world.

Power is the influence an individual or organization holds over others. Power allows individuals to sway worldly events and worldly relationships. Power allows people to control others. Increasing amounts of power can be obtained by various techniques.

In R3, the most powerful institutions on the planet have united in order to thoroughly investigate the possibility of blockchain technology — namely, private technology —  in streamlining banking and governance processes. A consortium of the world’s power-brokers, R3 members are already proposing systems and schematics. In many cases, these banks are exploring private blockchains or confederated-consortium chains.

Antonopoulos argues these firms will fail. There won’t be functional private blockchains. What Antonopoulos ignores is the sheer amounts of money these institutions have.

Antonopoulos’ notion that these financial institutions will not succeed in developing a private blockchain is similar to a misconception in another nascent industry: cannabis. In cannabis — an industry that evolved underground for much longer than Bitcoin — many participants believe that the foremost bio-technology firms on the planet, like Monsanto, will not be able to quickly create and patent their own strains of marijuana. As scientists in the space will tell you, that is a naive thought. Major corporations — with billions, and even trillions, in assets — have the best in scientists working for them, as well as the best in technology. They will be able to create new, potentially superior strains in mere years, patent them, and offer them at better prices than “mom and pop” growers.

Similarly, technology firms like IBM, Intel and Red Hat can afford the very best developers. If developers are not interested in working in the corporate world, the economics of the situation do not suggest they will go and work for an online creation community like Bitcoin, with its uncertainty, and pay based on future bitcoin price gains. Almost invariably, they will go where the money takes them. True believers work on Bitcoin, not those agnostic to how their wealth is obtained.

In reality, the brightest minds in technology seem to be moving towards experimenting with private blockchains. Most of their time will be spent on experimenting with how to  secure such systems. What they develop in the future, we cannot know in the present. At IBM, the developers there will tell you that Bitcoin is not secure. And that, in fact, it is they who will crack the code for truly securing a blockchain system. And, in their minds, they will have done so for the first time. 

The shortcomings of Bitcoin’s security system have long been known. Hal Finney took issue with the CO2 emissions of Bitcoin’s demand for wasteful computing power.

Antonopoulos doubts the effectiveness of the power held by the most influential organizations on the planet to guide the evolution of blockchain technology, and how it is perceived. To think, as Antonopolous seems to think, that an unprecedented online creation community will successfully figure out how to implement blockchain technology for consumers is extremely risky conjecturing. Consumers are for more likely to trust brands that have spent billions upon billions on marketing over decades than a tyranny (or democracy, depending upon who you ask) of online developers.

Antonopoulos’ line of reasoning parallels that among many Bitcoiners, particularly the libertarian and anarcho-capitalist factions, who believe Bitcoin will replace the modern financial system. While a fun notion to consider, there is little objective evidence for this happening. Let’s take a look at a disruptive technology — the Gutenberg Technology — to which some have compared Bitcoin. If the most popular book printed on the Gutenberg press were a science book, I might more easily accept the notion that Bitcoin could become the keystone banking system. But, that book was the Bible. And, still today, the world is marred by fantasies about the way things truly are. We are drowned in a sea of ignorance. Could it be, similar to the Gutenberg press, that not decentralized money is propagated by blockchain-inspired technology, but, rather, the furthering of baseless, fiat currencies?

Many deep minds in the technology space believe that a private blockchain is a possible iteration for the technology. Indeed, these people have spent more time on developer forums and developing for blockchain technology than Antonopoulos himself (and, admittedly, myself).

In summation, there will not only be public blockchains, and public-confederated blockchains. There will also be private blockchains, private-confederated blockchains, and maybe even state-enterprise blockchains.

What do you think about Antonopoulos’ opinions on private blockchains? Let us know in the comments below!

Images courtesy of LondonReal, R3.

Justin OConnell

Justin OConnell

Justin is the founder of GoldSilverBitcoin . His work has appeared in VICE, MERRYJANE, Bitcoin Magazine and elsewhere. If you appreciate this piece, please consider a tip: 1MjJ4NBi3ALFitNKpWgoWQmugH7czEdSNV

  • DavidStrayhorn

    The fact that R3 has lots of money to invest in private blockchains, with more undoubtedly forthcoming, is nothing new to AA. I think you have avoided the crux of AA’s argument, which is that if you make a blockchain private, you have eviscerated what made the technology special in the first place: that it is trustless. So the question is this: what does R3 hope to achieve with a private blockchain that they can’t already do with an old fashioned database?

  • reddibrek

    I find it a bit odd that you seem to be taking offense at Antonopoulos based on your core argument that “… there will not only be public blockchains, and public-confederated blockchains. There will also be private blockchains, private-confederated blockchains, and maybe even state-enterprise blockchains.”

    Perhaps I have not read deeply enough but if I understand correctly Antonopoulos has never said that private blockchains will not exist – it would instead be accurate to say that the prospect simply does not interest him.

    This is not about the technology – it is about the principle of decentralisation itself, which is applicable on a profound level to human values of trust, responsibility, power, etc. Such an ideal is a powerful one, both historically and today; it would be folly openly to rely on premises such as “Consumers are for more likely to trust brands that have spent billions upon billions on marketing over decades…” Take a look around you – it seems like not a week goes by without established corporations that spend billions on marketing losing their reputations in a flash – a phenomenon hugely magnified by the power of the Internet.

    I agree with your final statement – both public and private blockchains will exist. But to Antonopoulos and many, many others you may as well be comparing apples with oranges.

  • Alex Rockwell

    Little point in a private blockchain with trusted parties. Just use master-master replication between them if they are indeed trustworthy.

  • smd

    Let’s hope many billions invested by R3CEV in talented people like Mike Hearn and Justin OConnell pay off handsomely sooner or later.

  • Black Dynamite!

    Justin, you seemed to have missed his point and argument entirely.

    He has put out videos on his YouTube channel about how private blockchains will become office “Intranet 2.0″ which was all the rage in the 90’s. Their closed networks helped the company do nothing but micromanage employees better.

    AOL, Netscape, Compuserve and other closed Internet-light services……where are they now?

    We’ve been through this before with the Internet and the financial establishment is making the same mistakes, not learning from history, so they’ll repeat it. Andreas is right.

    Also, he has never said Bitcoin will replace the dollar or other mainstream financial systems. It’s superiority will make them obsolete, but people will still use them, like people use newspapers today. Smart people will use computers and The Internet. Dumb people will use the newspaper, and get left behind.

    Making a private blockchain is fine, and will help the companies become more efficient, internally. What they won’t do is make them more relevant, faster or stronger in the marketplace, beyond their corporate walls. These corporations think the blockchain is the key to Bitcoin, and they are wrong. Bitcoin is the invention and blockchain is just a slow ledger it runs on.

    Think of a tank and the tracks it drives on. The banks just want to buy the tracks, and have no plans to put a tank upon them, so what will happen? Not much.

    The point is we’ve been through this before, Justin, with The Internet. The Establishment tried to co-opt The Internet 20 years ago and failed. They look ready to fail again. They’re building copies of oysters with no pearls to put inside. Good luck with that……

  • Andreas M. Antonopoulos

    What a bullshit strawman argument. You made up what I think based on a single tweet, without asking me what I actually think. You built up an empty strawman argument and then gleefully tore down your own misconception.

    Perhaps next time you will ask me? Or is it just easier to put together a pile of speculation under a click-bait heading? It’s not even worth the bytes it consumes on the server.

  • Milly Bitcoin

    LOL. Many of your tweets contradict statements you made yourself on Let’s talk Bitcoin in the past. You are an “attention troll” so you are getting what you deserve.

  • Bitcoin Enthusiast

    Looks like he made some points based off your tweet and did not attribute it to you just the catalyst for the opposite side of your opinion.
    Yes it was one tweet but pretty forceful you might want to take into consideration how much weight your words have in the industry as a tweet like this with strongly worded language you used was going to get a reaction. Quote from your Tweet “If it ain’t open, it ain’t worth shit”
    People with your status in the industry should realize that saying something like that is drawing a very clear line. You made no qualifier that there was margins for error or that your tweet should have been taken as anything other than face value.
    While the writer’s opinion piece does not read like a hit piece I can see how you would think it would be since it was your own words that sparked this debate.
    I do also agree Justin should have reached out to you to get your further statements on your tweet.
    I think everyone is getting very thin skinned lately and knee jerk reactions are begetting knee jerk reactions in a chain.
    You calling him out for a tweet that was just as much click bait as his opinion piece.

  • Milly Bitcoin

    He knows better. Decentralization is a continuum and there are some use cases applicable throughout the spectrum of decentralization as several startups have pointed out. Andreas is simply looking for brownie points from cultists, he doesn’t care about mass adoption. He sounds like he wants to be “king of the kooks” while shunning normal people based on his activities over the past several months.

  • Andreas, I am having him write a follow up article to his opinion piece he wrote in reaction to your tweet which was very clear how you felt.
    He took the opposing view. That does not mean his view is any less important or should not be heard because he did not agree with you or even what I feel about Blockchain technology and its uses.
    I will not censor writers ability to voice their views and opinions as doing that squashes productive dialogue.
    That being said he should have asked you for a further statement on your tweet. I can understand him thinking he did not need to as well as you were quite clear how you felt in that single tweet.

  • I agree and hear you Evander but he was trying to take a counter point in his opinion piece.
    We have all seen this before with the internet as you said and other tech over and over.

  • Milly Bitcoin

    Trust is a continuum, like decentralization.

  • Milly Bitcoin

    LOL. You have no clue what banks do beyond what you read on reddit.

  • Wait, this entire article and the conclusions made are based on your assumptions about a tweet? You lost me at cannabis and Monsanto… was all over the place, very weird. I suspect it’s an article meant to cause a stir and get more hits.

  • Private blockchains don’t allow the possibility of *permissionless integration* like public blockchain do, that’s the main downside in my opinion, the ability to constantly integrate and evolve, very similar to open vs closed source software.

  • No-one is asking you to censor it – just read it!

    The article is full of assumptions and assertions that simply do not follow from the tweet in question. To be honest, I am genuinely confused as to how you cannot see that.

    Perhaps minus a bit of vocabulary, a schoolboy could have written it. It’s all made up – no research.

  • Romm333

    I am now 100% convinced that Milly Bitcoin is a paid shill who’s purpose is to do doing nothing but spread disinformation and argue political points on the Internet concerning Bitcoin.

    From Bitcoin article to Bitcoin article, doing nothing but spreading disinformation and slandering authors.

    What a disgrace.

    I hope people see your account for what it is.

  • Milly Bitcoin

    Respected members of the Bitcoin community are few and far between. Jerry Brito is good person to listen to. Andreas has some good information but he uses his knowledge to pander to cultists like you with his agenda-trolling. Anyone can look at all the Reddit circle-jerk nonsense to see for themselves. Several developers (Peter Todd, Eric Voskuil, etc.) are making a career out of agenda-trolling the cultists.

    As for your claim that people are paid to comment, you will be embarrassed by those posts once you become an adult. The cultists like you have 2 or 3 conspiracy theories every week.

    Further, all my information is on the web if you care to look. I got the ruling from FinCEN so US Bitcoin miners didn’t have to register as money transmitters. I also got that bogus US trademark for Bitcoin cancelled at the US patent and Trademark office. So who paid me to do that stuff? Maybe you can send me some cash and I can work for you? LOL

  • Milly Bitcoin

    Yes, but most things don’t need “permissionless innovation.” Some things do, and those use cases are important, but it is not necessary and/or detrimental to most things. Look at the block size debate as a glaring example. If every system has the constraints of the Bitcoin consensus we would still be living in caves.

  • Joey Ballard

    I’m with Andreas. Private blockchains will do nothing for the unbanked. Everything’s going open source even physical objects look at 3D printing. Does anyone really think there’s a need for a brand new closed money system?

  • Tyrant Fluffy Pants

    I’m 100% with Antonopoulos, so it the Metcalf law and the history of all new technologies ever.

  • Tyrant Fluffy Pants

    I’m 100% with Antonopoulos, so is the Metcalf law and the history of all new technologies ever. History also shows us there will be plenty of shortsighted people and flagmen laws along the way…

  • Also some organization are looking at public blockchain use cases where they put private data encrypted into the blockchain. That’s a good one I think, it’s a bit tricky to maintain the encryption keys secure but with the help of ring signatures or other similar techniques it can be done.

  • J_O_N_A_T_H_A_N

    if the masses knew about what banks “really do” they would simply shake their heads and say “oh well”

    people used to boycott, now we just complain and pine for another happy meal to go with our Hulu watching marathons

    what a boring anglo saxson planet we’ve become

    and Andreas is an easy target because he’s mostly right

    but this article is a bee bee gun and its follow up won’t matter much really

    excuse me while I run to Taco Bell before my next mental injection of Disney god subliminal mind control

  • Milly Bitcoin

    The same sorts of things happen in both banking and Bitcoin. The banking system is full of trolls like Andreas and small groups of insiders just like Bitcoin. People said the same thing you are saying during the late 60’s and Woodstock … and again in the 70’s with punk rock. Check out some Jello Biafra for the 80’s version …. “Give Me Convenience or Give me Death” lol

  • Marco Maltese

    I stopped after 20 lines. The reason is easy explained in my book (free ad no bank will ever offer a thing that is offered by something that is of nobody.
    No bank (especially central banks) will offer anonymity like Bitcoin (or other altcoins), no bank will offer almost free transfers like Bitcoin, etc.
    Banks are a method of control first of all, so it’s stupid to think that they will give up control for money. They don’t need money. They only want to hold control.
    The problem is: the blockchain was invented exactly to escape control. It was invented to be of nobody.
    So banks may actually earn something from it, maybe more security (or to better say it, they will drop the security issues on the clients…), maybe they will save some money and lower a bit the prices for their services (which are like robbery at the moment), in example.
    But why would then a client stay with a bank that still asks 5% of a money transfer and also drops the security of his account on himself then?
    Private blockchain can help the private enterprises, but they will NOT give more to the final clients, simply because banks do not want to give more to the clients. The most required feature clients want from money transfers is to drop down the third actor. Banks won’t give this up, EVER, because, together with governments, they are a method of control.
    Think better, my dear writer.

  • AIR

    I love how frequent ad-hominem attacks are in the bitcoin world. Don’t like what someone is saying? Avoid their argument and attempt to discredit them. Par for the course.

  • AIR

    What are you so pissed about? We knew how you felt about private blockchains well before this; if you think the author got all of his information from your 140-character tweet you’re not thinking very hard – there’s no need to ask you what you think about private blockchains, your thoughts on the matter are littered all over the internet. You’re the one who put the tweet out there — don’t get pissed off at people for responding to it at face value.

  • Rassah

    I remember the sheer amount of money AOL and Compuserve had with their “private internet.” Didn’t seem to help them any…
    Or telephone companies that owned all the telephone landlines privately and charged $0.10 a minute to call the nearby city, who’s entire business got wiped out by VoIP.

  • Rassah

    Private blockchains without permissionless innovation are called “databases.”

  • Romm333

    You’re comment history is nothing but a pattern of slandering authors and accusing everyone of being “cultists”.

    You should take a long hard look in the mirror and take a look at what a “cultist” looks like.

  • Romm333

    @ AIR

    Ad-hominem must be a word that’s a little too big for your vocabulary considering you’re not using it correctly.

    Milly’s comment: “Andreas is simply looking for brownie points from cultists, he doesn’t care about mass adoption.”

    My comment : “Milly Bitcoin’s account does nothing but spread disinformation, slander
    authors and slander respected members of the Bitcoin community.”

    What I said was a direct reference to Milly’s comment about Andreas.

    Good try.

  • AIR

    Uh, you ignored his argument and attacked his character instead. Thanks for driving the point home for me bud, that’s textbook ad-hominem. Nice try!

  • Milly Bitcoin

    As I explained, decentralization and trust is a continuum and not a bright line. It is closer to a database run by a committee. I don’t think the use cases are as ubiquitous as some “blockchainers” claim but they do exist.

  • Milly Bitcoin

    I am not aware of anyone putting data into the blockchain beyond cyptogrphic hashes. The data would need to be stored at every node. Jeff garzik has written a few articles it and he talks about someone who wanted to put a movie in the blockchain and other claims about storing child porn.

  • Milly Bitcoin

    No, I call the group of people making wild claims cultists and those people are making Bitcoin look ridiculous. If you want real information try Coin Center and the free Princeton university class. Brock Pierce has a handle on what consumers want.

    A Bitcoin cultist is someone who spread misinformation about Bitcoin because their agenda/religion is what is important to them and not the Bitcoin technology. Andreas is generally better than most of the cultists but he allows his agenda and his attention trolling to cloud his thinking at times.

  • Romm333

    This is the 1st comment of yours I respect.

    Thank you for taking the time to explain your reasoning.

  • Rassah

    Your “continuum” is missing a critical variable: efficiency (or cost). Blockchains are highly inefficient. The instead cost is the price we pay for not relying on trust. If the system has a limited number of trusted people anyway, a simple limited-access database, even a periodically hashed one, will be vastly superior and cheaper than a blockchain. And companies who fall for the blockchain hype will just find themselves wasting money like AOL did when it tried to build, maintain, and curate a private internet.

  • Rassah

    Uh, you do know Brock is an anarchist and has all those views you claim as being “cultist,” right? He just keeps a better (quieter) public image about it.

  • Milly Bitcoin

    Yes, that is probably correct for the most part but there may be some limited cases where it is useful. This is what I try to explain to cultists who go around saying “decentralize everything.” You need a business to justify decentralization. If people have problems with the centralized authority then they can circumvent it with a decentralized system. that does not mean every system should be converted to an expensive decentralized model.

  • Milly Bitcoin

    I don’t follow him that close but he makes rational comments when he talks about what consumers want. As for being an “anarchist,” no rational person describes themselves that way. That moniker is for teenagers, mentally ill people, and wing nut weirdoes like yourself. Anyone who declares himself an “anarchist” should not be expected to be taken seriously.

  • Rassah

    That’s what I’m saying, these idiots are trying to use an expensive decentralized model, because blockchain is hip nowadays, and they have no idea what it means or does, and they’re a centralized group, so have no reason to use decentralized tech.

  • Milly Bitcoin

    They are not idiots, they are smart people who control a significant portion of the economy. Instead of calling them idiots you should learn from them and then use that information to advance Bitcoin. Instead, many of the cultists just go around calling everyone stupid and then presenting ridiculous, childish arguments. Peter Todd does that all the time when he is agenda-trolling. He claims to have all these fintech clients and then he goes around saying they are all stupid and they are all engaged in some kind of conspiracy. If he wants to improve Bitcoin then he should study what they do and come up with ideas to improve the situation.

    Let’s Talk Bitcoin used to do that in the early days and they would interview people such as the guy running the US Money transmitter association. However, that show was taken over by ignorant cultists who sit around making fun of everyone. I stopped listening after the interview with Preston Byrne where Stephanie Murphy and a bunch of kooks said he should be hanged for not being libertarian enough.

  • Freya

    Andreas didn’t reply to your email? Oh well in that case write what you like. Lol

  • Rassah

    Then stop taking most of the people involved in bitcoin seriously. I’m talking most of the developers, investors, and business owners. They don’t admit it publicly, because of people like you, but they do talk about it in private.

  • Milly Bitcoin

    I never have taken them seriously and neither do most other people and they never will. Roger Ver? Erik Vorhees? Charlie Shrem? Theymos? lol. They are not business people, they are kooks. Your view is distorted because you are in an echo chamber. The developers are mostly idiot-savants who understand Bitcoin technology but they have no clue how it fits into the world. Mike Hearn understood and look what happened there. The freaks drove him away.

    This kind of things commonly happens during elections. Like-minded people work on a campaign and they think “everybody” agrees with them. Then election day comes and they are confused and dismayed as to why they lost the election. If you have to hide your agenda from your customers then that is not much of a business plan, it is more aptly described as a delusion.

  • Rassah

    I was thinking more about Satoshi, Gavin, Jeff Garzik, Adam Back, Greg Maxwell, Wladimir, and that gang.

  • Milly Bitcoin

    They are developers and they know next to nothing about running a business or promoting something to be used by the public at large. Anyone with cash can hire developers to do what they do.

  • Coinoleum

    It’s hilarious that there is an internet troll out there who thinks she can kill bitcoin with posts in the bottom half of the internet.

    It’s fun to watch you waste your time for so long. Keep it up. I’ll be doing something you don’t know much about: having a life.

  • Coinoleum

    Speaking of transmitters was it SWIFT that lost $160 M in the last month?

    That’s “smart people”.


  • Milly Bitcoin

    SWIFT is a communications system and cannot gain or lose funds. You don’t even look up basic information about what you are trying to talk about.

  • Milly Bitcoin

    Who wants to kill Bitcoin? it is a great technology. Too bad it is full of kooks and agenda trolls like AA who distort it in an attempt to promote some fantasy agenda. These freaks are ruining Bitcoin.

  • Look at the privacy-on-the-blockchain post on Ethereum blog. I guess some names of companies or projects implementing similar solutions that save private data on the public blockchain already, maybe one that relies on an oracle to decrypt the data will be out soon because there’s already an oracle service that lets you decrypt private data for ethereum mainnet. We’ll wait and see ;)

  • Milly Bitcoin

    The post on the etherium blog is about transactions and not random data. Etherium addresses (like Bitcoin addresses) are on the blockchain. in the case of etherium the terms of the contract are also on the blockchain. The article at the etherium blog is about hiding the terms of the contract from being viewed on the etherium blockchain.

    If you think companies are planning to store random information like a database on public blockchains then you have a fundamental misunderstanding of what is going on. Jeff garzik explains this on some old blog posts so you may wish to read those articles.

  • It’s Ethereum not etherium… anyway contract calls are transactions, data is not random if it’s meaningful to the business. Assets, ownerships and many more things can be stored inside a data field like Bitcoin’s OP_RETURN or in a data value inside an Ethereum smart contract, code object or however you want to call it (always trough a me a transaction, of course), and you can apply encryption with 1,2, any number of private keys to be sure the data you store is readable only by defined parties who have a sufficient amount of keys. Of course if you fail to protect the majority / required number of private keys, the data becomes “public”. I guess it is especially useful to use a public blockchain for pre-trade data or other data having similar charasteristics, that will become public / not important after some time anyway.

  • Milly Bitcoin

    It only stores transaction data. it does not store things like pictures, personal information like name/address, or other random data that is not transaction data other than small fields where you can store things like hashes.

  • …pictures and larger data except text and voice quality audio files (voice messages) need to be hashed, you have to put the reference on the blockchain and the files in a “bigger” decentralized, public data store like ipfs or torrent if you really really want to save that much data and not deal with all the issues of video vs text/audio. I think that text and voice quality audio files have a much lower barrier of size/transmission/on-chain-storage-cost and amount of privacy issues vs those big fat and privacy/filterning/problematic video files. this is just my own opinion and of course, somewhat a bit of a joke too :)

    what do you think about these?
    like about ipfs? I’ve seen in all these posts you seem to know a lot, for example, what’s your favourite blockchain technology? why? where you first heard about blockchain? what are your thoughts about the this moment in time, evolution and spreading of the internet and afterwards the post-bitcoin-era ( you are Milly bitcoin you should know it :) ) ? without going in the specifics, without posting any link or reference to other people, company or projects.
    Thanks, I just ask that.

    another thing you could say is something like:
    if the “blockchain” is a transactional, key based, decentralized p2p system then what is x (where x can be any other thing)

    and build an RDF graph or some other public relational data structure, put it into the blockchain, put the hashes of the wikipedia articles on the blockchain too and create an entire different cryptographic-proof mathematical sure reality

    the blockchain is a time server and database, you can timestamp entire “facts” and prove that they actually happened at that time (by using the block time)

    ok sorry I’ll stop I written too much but feel free to reply