Isn’t It Just A Database?


This week I was listening to an interview with Adam Ludwin, CEO of Chain, on the A16Z podcast which made me think (again) about the blockchains vs bitcoin debate.

For those who haven’t heard of Chain, they started out as a Bitcoin API startup and recently pivoted into the world of permissioned blockchains – which is bang on trend at the moment. Also, this move gives Ludwin a fair degree of credibility in discussing this topic.

During the interview Sonal Chokshi, one of the interviewers, asked a question that I’ve had asked of me a fair few times and, to be honest, I’ve always struggled to answer it succinctly. Her question revolved around whether a permissioned (private) blockchain was simply a database – implying that this isn’t all that interesting (which generally reflects the view most bitcoin maximalist have).

Ludwin gave a very restrained and thoughtful answer, which is generally missing in conversations relating to this question. Specifically, he noted that a permissioned blockchain is different from a database in two crucial ways:

  1. it’s shared. That is, it’s distributed to every participant in the network (implicitly making it more fault tolerant); and
  2. more critically, the assets which sit on the network are controlled by the owner of the asset.

The second point, he noted, is one that is commonly forgotten about during a ‘blockchains are only databases’ debate. Ludwin noted that this is a critical differentiator, as usually it’s the owner of the database who owns the assets that reside on that database.

Although a bitcoin maximalist might dispute this, it is true that many do forget about the ‘magic’ of private keys on a permissioned system. Regardless, of what you think I do highly recommend the podcast and I’ve included a link to it below.

See also  That’s Trillion With A ’T’

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