Ethereum has the potential to disrupt some of the biggest and most powerful tech companies in the world. At least that’s what one of its co-founders and others in the crypto world hope and believe.
Joseph Lubin, the co-founder of the decentralized cryptocurrency platform Ethereum, spoke at the South by Southwest Interactive conference on Friday to a packed auditorium filled with cryptocurrency enthusiasts and business people.
Investor interest in blockchain technology and cryptocurrencies remains high — not just due to big price movements — but also because the underlying technology and its promises of decentralization and anonymity offer benefits to businesses and consumers. Indeed, not to be outdone, a number of top investors from famed venture capitalist Tim Draper to the Winklevoss twins have hailed blockchain as the “next internet.”
Lubin was an early developer on the team that launched Ethereum as a platform to move blockchain technology beyond its roots as a currency platform that started with Bitcoin. Vitalik Buterin, one of Lubin’s co-founders on Ethereum, has argued that Bitcoin needed a script for developing applications beyond currency so it could deliver and use any type of application.
Lubin’s talk doubled down on Ethereum’s promise of decentralized applications, touching a nerve among large, social-media stalwarts. Ethereum’s rise means inroads into Facebook (FB – Get Report) and Alphabet’s Google (GOOGL – Get Report) which, from his point of view, are a treasure trove of personal data vulnerable to hackers and enterprises willing to sell or exploit it.
“On the web right now, I would argue that identity is broken,” said Lubin. “We spray aspects of our identity around the web, it’s stored on corporate servers and is monetized by corporations, and often aspects of your identity aren’t well secured by those organizations.”
Facebook, Amazon, Apple, Netflix and Google, along with “brick and mortar” giants in finance and retail, have all dealt with data breaches and loss of consumer trust. The failure exposes gaps in not just security protocols at companies that store consumer data but also fundamental flaws in fiat currencies — U.S. dollars, euros, and yen — that offer no real protection nor anonymity for any transaction.
Web 3.0 Means You Can Control Your Data
Of course the internet has long served as a powerful communication tool and utility for trade. Yet the same internet has also revealed new opportunities for fraud, theft, and identity hijacking. Ethereum’s approach — dubbed “Web 3.0” — reinvents data collection, storage and control, placing each of the privacy “bundle of sticks” with the owner — often an individual person.
No longer will consumers transact on the web with giant, faceless corporations that capture and resell — or lose — all of your data. As Lubin explained: “Instead of the client server architecture where you’ve got one company, say Google or Facebook, that has a bunch of servers and we’re interacting with them as a counter-party, this new kind of application paradigm has all the different nodes on the network and they are all effectively the back end for the application. So nobody is in control of it, and you can build these platforms where no one’s overly monetizing it.”
Ethereum provides an answer, although uncertainty around adoption remains, especially as traditionally disruptive enterprises are seeing the tables turn on them. Where Google once replaced telephone books and Netflix unseated Blockbuster, Ethereum’s platform poses a very real threat to the existing tech order’s dominance.
Consumer awareness doesn’t appear to be a necessary component for change, either. “The depths of blockchain won’t be understood by the masses ever,” Lubin said. “We need software engineers to understand blockchain. Consumers are just going to keep using the world wide web, they’re just going to have a different relationship to the world wide web and those applications.”
The impact, though, could be outsized. Just how big could Web 3.0 get? “Governments might run more efficiently on blockchain. Health care and records can be better managed on the blockchain. Real estate can be titled on the blockchain,” Draper told TheStreet in an email. “The best governments are embracing the change. The worst are denying the progress.”