Blockchain Technology Today Is Like 1960s Internet, Says Ex-JP Morgan Executive

Omar Faridi
  • The former head of JP Morgan's blockchain efforts revealed she believes blockchain today is like the internet of the 1960s.
  • Her words imply there's still a lot to come, as we're still in blockchain technology's early days.

Amber Baldet, former head of JPMorgan’s blockchain efforts, recently spoke to Business Insider about her views on blockchain technology. She said that the distributed ledger technology (DLT) of today resembles the internet from the late 60s. Her exact words were:

“The internet in 1969 looks like what blockchain is. That's not to say blockchain doesn't have any use cases — we are just far behind the full extent of what those networks can be used for. Right now, there are a lot of companies in distributed storage that are onto something. It'll be fascinating to watch those innovations come to fruition.”

Amber Baldet

Amber then proceeded to explain how she is planning to contribute to this nascent technology. She stated that there’s currently a “divide” between old-school Wall Street and the cryptocurrency market.

She explained that once the digital currency market and its underlying technology have matured, we will begin to see the real “internet of value”. This will, according to Amber, consist of cryptocurrencies, real-world assets, permissionless and permissioned blockchains, and the traditional financial system as well. She then confidently asserted that “there will be all of this.”

Too Much Hype

 There’s a lot of hype, too much in fact, surrounding blockchain right now. Just like companies such as Kodak and Long Island Iced Tea jumped on the cryptocurrency and blockchain bandwagon to boost their share prices, plenty of other traditional businesses have also attempted to leech off this trend.

The fact of the matter is, blockchain is not meant to be a solution for everything. Samson Williams, a blockchain and initial coin offering (ICO) advising consultant at Axes and Eggs, told me that DLT isn’t needed and can even make a data processing system slow and inefficient. Samson further stated that oftentimes a simple Excel spreadsheet will suffice.

This view is actually in line with what many other blockchain experts believe. Notably, Sheila Warren, blockchain head at the World Economic Forum (WEF), is working on educating people about what this distributed ledger actually is. Sheila and her colleagues have created a type of  “decision tree” which allows individuals and organizations to determine whether blockchain is an appropriate solution for their business model. The extensive WEF guideline says:

“Blockchain hype is damaging to the overall development work required to reap the benefits of this new technology.”

WEF guildeines

Blockchain Technology's Current State

The blockchains that now exist have been plagued with scalability issues. The Bitcoin and Ethereum blockchains, for example, have not been able to scale effectively. While there is development work going like Ethereum’s Casper, Sharding protocols and the Lightning network, which promises up to billions of transactions per second, scalability issues are still a serious concern at the moment. Furthermore, many have criticized current proof-of-work networks for consuming more electricity than entire countries, which is not environmentally friendly.

While these concerns are valid and must be addressed, there are also some solid blockchain projects being developed. One of them being the Factom protocol. This crypto platform serves to provide the proof of authenticity of documents. These documents can be legal documents or even research papers.

It does not store the actual documents. Instead, it holds the evidence or proof that can be used to verify whether someone is or isn’t a document’s author. The project is currently keeping a low profile.

Based on what most blockchain and crypto experts believe, and also according to what we’ve discussed here, Amber Baldet does have a realistic assessment on the current state of blockchain technology today.

While Amber’s belief that permissionless blockchains will be a part of the future fintech world is not shared by many others, her overall view is actually quite common among experts such as Cornell computer science professor Emin Gun Sirer.

Istanbul Upgrade: 28 Ethereum Improvement Proposals Under Consideration

Ethereum’s developers have submitted 28 ethereum improvement proposals (EIPs), which include recommended codebase modifications that may be integrated into the upcoming Ethereum (ETH) network hard fork, called Istanbul.

The EIPs  are expected to change the smart contract platform’s mining algorithm, code execution and pricing mechanism, and data storage process.

Deciding Which EIPs to Include With Next Hard Fork

During the bi-weekly meeting between Ethereum Core developers (on May 24, 2019), the blockchain network’s development team discussed various approaches and EIPs which may help the platform scale effectively.

Commenting on the process for considering EIPs to be added to Istanbul, Hudson Jameson, the Community Relations Manager at the Ethereum Foundation, remarked:

We’ll talk more on the All Core Devs Gitter channel to wrangle in some of these EIPs that are still stuck in proposed and as quickly as possible decide on which ones are being implemented for Istanbul.

EIP 1108 Tentatively Approved During Bi-Weekly Meeting

Jameson also confirmed that the deadline for submitting EIPs to be considered for Istanbul passed on May 24. He added that Ethereum’s developers are now reviewing the proposals in order to determine whether they should be implemented in the next Ethereum hard fork .

EIP 1108, which recommends small adjustments to Ethereum network gas fees, was tentatively approved this past Friday (during the bi-weekly meeting). As explained on its Github page, EIP 1108 addresses the following:

The elliptic curve arithmetic pre-compiles are currently overpriced. Repricing the pre-compiles would greatly assist a number of privacy solutions and scaling solutions on Ethereum.

Currently, the implementation details related to EIP 1108 (and other EIPs) are being reviewed and Ethereum Core developers will be presenting benchmarking figures for repricing pre-compiles (for EIP 1108) during the next bi-weekly meeting.

According to Ethereum developer Rick Dudley, EIP 1559, which proposes a new type of transaction fee structure for Ethereum, is “a pretty complicated change.” Dudley believes that the final implementation specifications for EIP 1559 will most likely not be finalized by the time Istanbul goes live.

He also confirmed that the Istanbul hard fork, or backwards incompatible upgrade, will be activated at some point in October 2019. However, Istanbul’s Github states that the exact date and time for the planned Ethereum network update is to be determined (TBD).

ETH Mining Protocol Change Under Review

EIP 1057, which recommends a change to Ethereum’s proof-of-work (PoW) mining protocol, is also being considered to be included as part of Istanbul’s codebase modifications. Notably, the market for ether mining rewards has been estimated to be at $655 million (per annum) and powerful ASICs have been consistently outperforming lower-priced and less powerful graphics cards.

One of the design goals, for Ethereum, is to reduce miner centralization by modifying the current PoW mining protocol or replacing it with the ProgPoW algorithm.

Explaining why the implementation of ProgPoW was postponed, Jameson said

We ran into issues starting the ProgPoW audit. We had a hardware partner who specialized in ASICs who was going to work with Least Authority to perform the hardware parts of the audit. They are no longer participating in the audit so we are looking for other auditors for the hardware portion.

Developer Compiles Spreadsheet of All EIPs Under Review

In statements shared with CoinDesk, Ethereum developer James Hancock noted that the smart contract platform’s development team will be working on merging accepted EIPs for Istanbul. The merged proposals will then be added to Ethereum software clients, Hancock explained.

He also mentioned:

The suggestion is to have reference implementations in two ‘major’ clients. The definition of major is pretty loose.

The blockchain developer has compiled a list of all EIPs being considered for Istanbul and they’ve been marked to indicate whether they’re “ready” to be integrated into the Ethereum mainnet