Goldman Sachs and the return of “Blockchain not Bitcoin”

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Here we go again. Goldman Sachs CEO David Solomon published an op-ed in the Wall Street Journal titled Blockchain is much more than crypto, which claims there is a future for technology as long as that future is determined by a small group of people. powerful. . Here’s a selection from the op-ed:

I still see blockchain as a promising technology if allowed to innovate under the right conditions. Under the leadership of a regulated financial institution like ours, blockchain innovations can thrive, Solomon wrote (emphasis mine). Although some blockchain start-ups require regulatory oversight, not all of them have the capacity to meet these requirements because they are young organizations.

You had the idea. The Goldman CEO’s message, in essence, is that the only way crypto and blockchain can be viable is to leave it to big banks like his.

For crypto veterans, it’s like watching a bad movie for the second time. The first time was in 2014-15 when, like today, a crypto bubble burst and scandals abounded. The title was different Blockchain not Bitcoin was the popular cry at the time, but the plot is the same: Trust banks to create a private and secure version of the blockchain rather than relying on public Bitcoin and Ethereum chains.

That plan didn’t work then, and it won’t work now. The first time the big banks threw over $100 million into a consortium called R3 led by a corporate suit with the right connections to Wall Street. Over the years, companies like R3 have produced little, even as decentralized crypto communities have sparked a wave of innovations such as Layer 2 solutions, zero-knowledge proofs, NFTs, and staking.

Although private blockchains will never compete technologically with public blockchains, there is a risk that big banks like Goldman Sachs will use their influence in Washington, DC to make their blockchain vision the only legal one. viable. It would be a bad result. Imagine if, when Congress wrote key laws in the 1990s to oversee the Internet, it did so in a way that handed control of the Web to AT&T, AOL, and Verizon.

Blockchain, including cryptocurrencies, is too big a technology for that to happen. As Solomon himself writes in his op-ed, blockchain offers a faster and superior way to confirm transactions related to finance, stock trading, and real estate. He is right and these requests are just the tip of the iceberg. Goldman Sachs should be congratulated for embracing blockchain as long as Solomon and his banker friends are willing to let everyone else do the same.

Jeff John [email protected]@jeffjohnroberts

DECENTRALIZED NEWS

Ethereum developers are targeting March for the so-called Shanghai update, which will allow users to drop staked ETH. (Bloomberg)

HiveMapper, which seeks to challenge Google Maps by awarding tokens to drivers who record street data with a $649 camera, is shaping up to be a mess. (Fortune)

The SEC has issued new guidelines requiring public companies to disclose their exposure to crypto assets and FTX. (CNBC)

A profile of Rep. Tom Emmer (R-Minn.) reveals that the new House Majority Whip is a longtime crypto advocate whose ties to the industry could mitigate more aggressive regulatory effects. (Wapo)

After days on the run, Sam Bankman-Fried said he would testify at a House hearing on December 13, but did not say whether he would appear in person. (NYT)

EVEN OF THE MOMENT

Timing is everything:

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