Categories: News

A Private Blockchain Does Not Equal Distributed Ledger Technology Without Bitcoin

To some people, it may seem like the traditional financial world is only showing an interest in distributed ledger technology, rather than the concept of Bitcoin. While this may be true to a certain extent, Bitcoin is not held back by any of the banking problems, centralization, or inflation. Plus, it is important to keep in mind these same institutions were opposing the blockchain as well until very recently. In the end, they will come around to Bitcoin as well. A private blockchain is far from a perfect solution. 

Also read: Bitcoin Needs More University Education Efforts To Reach Millennial Demographic

The Private Blockchain Hype Without Bitcoin

Looking at things from a technical perspective, it is entirely possible to have a blockchain concept that is not directly linked to Bitcoin itself. Even though are plenty of companies building on top of the Bitcoin blockchain for a very particular reason, traditional financial institutions don’t see things the same way just yet.

There is one thing these financial players tend to forget, and that is the main reason the blockchain has become such a major point of interest all of a sudden. People see the potential of this technology within and outside of the financial sector and think they can copy the technology in a private, closed loop environment.

For certain purposes, this approach may prove to be more than sufficient, as it will help speed up internal procedures and protocols. But for the most part, a private blockchain will ultimately become irrelevant as they lack the important trait of decentralization. Contrary to what some people might think, decentralization and private blockchains are mutually exclusive.

Related Post

When a financial institution rolls out their private blockchain, they have created a product for internal purposes. There is no decentralization to speak of, as that particular blockchain will only work for internal needs. Even though various private blockchains are capable of communicating with others, they will have to rely on central entities bridging the gap. In the end, this is the exact opposite of what decentralization means, as there will always be one or multiple intermediaries involved.

Banks are trying to replicate what has made Bitcoin so successful over the years, but they will never be able to do that with their approach to creating private blockchain. Bitcoin managed to achieve true decentralization by using one blockchain accessible to anyone in the world, without the need for central oversight. Traditional finance has a hard time letting go of their firm grip on people’s money, and a private blockchain is not the answer.

Partial Source: Business Insider

Images credit 1,2

If you liked this article follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin and altcoin price analysis and the latest cryptocurrency news.

JP Buntinx

JP Buntinx is a FinTech and Bitcoin enthusiast living in Belgium. His passion for finance and technology made him one of the world's leading freelance Bitcoin writers, and he aims to achieve the same level of respect in the FinTech sector.

Share
Published by
JP Buntinx

Recent Posts

Best Crypto Presale To Buy Now: Rollblock Delivers For Holders With New License, Record Sign Ups and 7000+ Games

Rollblock is quickly becoming the best crypto presale to buy, delivering unmatched value for its…

2 hours ago

Polkadot And Uniswap Gearing For Post-Christmas Jump As Rollblock Raises $7.4 Million in Presale

While Rollblock's continues its crypto presale, with its value increasing regularly, Polkadot (DOT) and Uniswap…

3 hours ago

IntelMarkets (INTL) Receives Massive Demand From Chainlink And SUI Investors Looking To Position For The Best Bull Run Gains

As the cryptocurrency market gears up for a bull run, IntelMarkets (INTL) is attracting significant…

3 hours ago

FOMO Selling Trigger $1 Billion Liquidations as LINK & SOL Bleed Heavily; What to Do Next?

In the past, Chainlink (LINK) and Solana (SOL) have been among the most discussed altcoins…

8 hours ago

Qubetics $7.4M Presale Revolutionises Blockchain as Bitcoin and Chainlink Drive Innovation: Best Cryptos to Buy for 2025

The crypto market is abuzz with excitement as 2025 approaches. While Bitcoin continues to dominate…

14 hours ago

Best Altcoins to Buy Today: Why Qubetics’ Presale Could Be the Best Investment Opportunity of 2024

The cryptocurrency market never sleeps, and every day feels like an adventure. From household names…

20 hours ago