Ethereum Advocate Warns Against Private Blockchain ‘Race to the Bottom’
Etherealize CEO Vivek Raman has warned that the resurgence of private, permissioned “consortium chains” is a “race to the bottom,” undermining the interoperability and liquidity blockchain technology was designed to enable. Etherealize, backed by Vitalik Buterin and the Ethereum Foundation, advocates for Ethereum’s open mainnet as the neutral base for institutions to build upon, adding permissioned and privacy-preserving features at higher layers.
The rapid uptake of gated networks by major firms contrasts with the emergence of new Ethereum-based products, such as BlackRock’s recent offerings, sharpening a debate over whether institutional adoption will favor open, public chains or curated systems controlled by corporate sponsors. Raman argues that these private blockchains, which offer inherent privacy and reduced counterparty risk, risk recreating siloed systems that hinder blockchain’s potential.
“It’s like we’re having consortium chain 2.0,” Raman said in an interview. “This is going to end up being a race to the bottom for consortium chains. You’re going to have consortium chains versus consortium chains.”
Etherealize positions Ethereum’s mainnet as akin to Hypertext Transfer Protocol (HTTP), with a more secure, permissioned, privacy-enabled layer sitting on top. Raman believes an open base layer is necessary for maximum interoperability and liquidity. “We strongly believe, and always have done, that you need a global, open, permissionless infrastructure as the base layer,” he said. “Then you can build all the permissioning on top.”
Christian Catalini, founder of the MIT Cryptoeconomics Lab, noted the tension in the market as real money begins to flow into blockchain technology. “If we land on these networks that are more curated and have a clear sponsor and anchor entity shaping their rules, then some of the pro-competitive benefits of blockchains will never materialize,” Catalini said.
