Open Vs. Closed Networks
We are still in the “intranet” as opposed to the “internet” stage of crypto adoption.
We are still in the “intranet” as opposed to the “internet” stage of crypto adoption.
During the early days of the Internet, it took some time for companies to realize that open networks are more valuable than closed networks. I see crypto adoption now following a similar trend, new market participants coming from traditional finance (Trad-fi) are warming up to crypto, but mostly developing their own “blockchain solutions” to tokenize real-world assets like stocks & bonds. This is undoubtedly a step in the right direction, but there’s a reason why the “internet” prevailed over the “intranet”.
Open networks are more innovative because they draw on a larger pool of talent enabling collaboration and participation from a diverse array of contributors. Examples like the Internet, or Linux demonstrate how open protocols and open source software fueled rapid innovation, leading to transformative technologies such as email, the World Wide Web, and bitcoin.
In-house blockchain solutions appear progressive, but do they merely replicate the old system with different technology? The innovator's dilemma unfolds as traditional finance confronts the disruptive force of open systems. Yet, history is full of examples showing that open systems generate more value, and always triumph over closed systems.
Closed networks require participants to innovate within the network, which becomes limiting compared to Open networks that set open standards and allow people to innovate and grow the network, as opposed to being confined to the restrictions placed by the closed network's gatekeepers.
TCP/IP and SMTP are the best example of open networks for information and Bitcoin is proving to be the best open network for money!
