From finance and insurance, to fantasy sport, established businesses and start-ups are exploring and implementing blockchain based projects, but are they in competition with each other or sharing a common goal?
While blockchain’s invention promises to disrupt established businesses, household brands have been some of its earliest adopters, launching numerous consortiums and initiatives. However, many of them, such as JP Morgan’s private ethereum based blockchain and Santader’s CashETH, have launched their own initiatives to gain some competitive advantage.
This gives rise to a new strategy that can be called competitive co-operation. As the industry is at a very early stage, most of the players need to co-operate to develop the underlying network so that it moves from barely functional to robust functionality, to address usability, to raise awareness of the blockchain’s invention and to establish working implementations.
One approach, seemingly used by Thomson Reuters, may be for multinationals to encourage their developers to participate in public or private blockchain implementations, thus re-training personnel and gaining the required talent. This benefits the public blockchain space as it provides more eyes and hands to develop the network, and the multinationals who can increase efficiency gains and save costs.
However, it also creates new competitive vectors as talented individuals may become frustrated with the slow movement of household brands and start their own project, but even here, what we are currently seeing is less direct competition and more competitive co-operation. Although there are some blockchain start-ups trying to disrupt industries, there are many more providing services to established businesses and even entering into partnerships.
James Carlyle, R3’s chief engineer, while announcing Corda is to be open-sourced, told Reuters:
We want other banks and other parties to innovate with products that sit on top of the platform, but we don’t want everyone to create their own platform … because we’ll end up with lots of islands that can’t talk to each other… If we have one platform with lots of products on top, then we get something that’s more like the internet, where we still get innovation but we can still communicate with each other.
Corda is just one such platform. There is also Hyperledger and Ethereum, all of which, although competing with each other, also co-operate as shown by Hyperledger’s recent offer of co-operation to ethereum’s community.
There is one exception however. While ethereum has often emphasized that they are not in competition with bitcoin, the attempted speculative attack during the DAO hardfork indicates that some in the bitcoin community see ethereum as a threat even at this stage. This was further in display during a heated discussion a few days ago between Vitalik Buterin and Gregory Maxwell, indicating animosity at such early stage from certain player in the bitcoin community.
This is in stark contrast to the overall attitude in other blockchain areas where a competitive co-operation approach dominates which is to be expected at this stage as shown by they early days of the internet . Although there have been many Apple v Microsoft flame wars, Bill Gate and Steve Jobs worked together at the start of the digital revolution, as, at that stage, the market was tiny, if at all existent. Therefore, rather than competing with each other, they had to raise awareness and develop the technology to its full potential first.
Similarly, with the overall market cap for digital currencies a mere $10 billion, the blockchain space is competing less within itself and more with updating the current paradigm to incorporate this new invention, not least because the protocol still requires extensive development for high volume use, naturally giving rise to a competitive co-operation approach.
Images from Shutterstock and the Hyperledger Project.
Last modified: May 21, 2020 10:14 AM UTC