Bill Barhydt, the chief executive of Abra, a Bitcoin-based financial mobile application that allows people to buy and sell fiat currencies, cryptocurrencies, and Nasdaq-listed stocks, expects enterprise blockchains by corporations to fail miserably.
On February 25, Barhydt appeared on Fortune’s Balance the Ledger segment where he spoke about the emerging enterprise blockchain sector and how it is ultimately doomed.
Current Blockchain Climate Is Similar to the Internet Hype of the Late ’90s
He compares it to the “extranet,” where corporations took the internet and made it work inside a firewall, only for it to fail miserably while the internet succeeded during the internet hype of the late 1990s.
“We went through this craziness in the late ’90s where for about a year and a half everyone was talking about this term ‘extranet’. It’s exactly what’s happening with this enterprise blockchain nonsense; where people have this fallacy that they’re going to make blockchain work inside the firewall. It’s all going to fail miserably.”
Barhydt, along with many other experts in the crypto space, believe that open-network cryptocurrencies like Bitcoin (BTC) are inherently superior over closed versions of the technology, which are being developed by corporations and favored by traditional businesses.
It’s a very similar concept to the extranet/internet dilemma, in which the public internet ultimately triumphed over private closed networks.
Will JPM Coin Fail Miserably?
A week before Barhydt’s comments on enterprise blockchains, JP Morgan Chase revealed they will be launching their own enterprise cryptocurrency dubbed JPM Coin, a virtual currency designed for the real-time settlement of payments within the bank’s operations.
According to Barhydt, he sees little value in JPM Coin and believes JP Morgan’s closed blockchain technology is a complete waste of time, just like the extranet was a waste of time back in the 90s.
The JPM Coin will be pegged to the US dollar (USD) and will essentially serve as a USD stablecoin used for the settlement of payments. Barhydt does not buy this for one minute, stating:
“I used to work at Goldman (Sachs) and I know that straight-though settlement processing has always been a big deal. I haven’t dug in enough to know if what they’re doing actually solves that problem.”
Do you think JPM Coin and other enterprise blockchains will go the way of the extranet? Let us know what you think in the comment section below.