OPINION: Buying Last Year’s Blockchain
First, there was bitcoin’s blockchain that proved distributed ledgers could work. Like with all initial versions of a new technology, it had issues like significant scalability limitations in that it supports only single-digit transactions per second.
A few years later, Ethereum and Ripple came along with throughput thresholds of approximately 20 and 1,500 transactions per second respectively.
And if everything goes as planned, Wall Street will witness the launch of the EOS environment into the wild on June 2.
If EOS performs as its developers claim it will, the newest distributed ledger on the block could support up to millions of transactions per second using its delegated proof-of-stake consensus protocol, which relies on fewer nodes to reach consensus.
The promise of several orders of magnitude in performance has garnered an incredible amount of support for the new environment. Since its publisher announced the development of EOS last year, the venture has raised a reported $4 billion in backing.
There is no way of telling whether the launch will succeed or not. There always are those last-minute issues that only pop up hours before any launch.
If it is successful, it moves the distributed ledger conversation beyond automating low-throughput workflows of syndicated loans and various over-the-counter markets.
Another question it raises for the industry is: How will firms deal with the rapidly evolving technology?
Saying we don’t need #EOS because we have ETH is like saying we don’t need cell phone tech cause land lines allow us to talk just fine
— EOSIAN (@eosian_) May 27, 2018
It took ethereum two years to reach its throughput threshold and a year for EOS to eclipse it possibly. Imagine the state of technology would be18 to 24 months after a distributed ledger project has wound its way through the typical approval, development, and deployment processes that financial institutions have in place. It would be using cassette tapes in a streaming world.
The bad news for Wall Street, and most enterprise organizations, is that the problem only compounds the further along the innovation curve the technology gets.
While blockchain developers look to make the next generation of blockchains faster, smarter, and easier to use, they should keep backward compatibility in mind.
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