By Robert Hackett
February 25, 2019

Bill Barhydt is no fan of private blockchains.

The chief executive of Abra, a Bitcoin-based app that lets people buy and sell currencies, virtual coins, and Nasdaq-listed stocks, expects corporate adaptions of the technology behind cryptocurrency to amount to little, if anything. As one of the earliest employees at Netscape, a dot-com era poster-child and creator of the once-dominant, namesake web browser, Barhydt said he witnessed the flameout of an analogous fad during the Internet’s early years.

“We went through this craziness in the late ’90s where for about a year and a half everyone was talking about this term ‘extranet,'” Barhydt said on the latest episode of Fortune’sBalancing The Ledger” show, referring to private IT networks. “It’s exactly what’s happened with all this enterprise blockchain nonsense.”

In Barhydt’s view, the open networks of cryptocurrencies like Bitcoin will prevail over closed versions of the technology favored by traditional businesses, similar to how the public Internet triumphed, generally, over private networks in decades past.

Barhydt isn’t the only enterprise blockchain skeptic. Critics say the technology doesn’t differ substantially from traditional database software. In a recent article, partners at the consultancy McKinsey noted that enterprise blockchain development has stagnated. Meanwhile, research firm Gartner dropped the tech to the bottom of its oft-cited “hype cycle” chart last year.

“People have this fallacy idea that they’re going to make blockchain work inside the firewall,” Barhydt told The Ledger’s cohosts, Robert Hackett and Jeff John Roberts. “It’s all going to fail miserably.”

A former Goldman Sachs analyst, Barhydt threw cold water on another Wall Street bank’s recently unveiled cryptocurrency project too. He said he sees little of value in JPMorgan Chase’s debut of JPM Coin, a virtual currency designed for the bank’s institutional customers to make payments, and that the technology is likely to be “a complete waste of time.”

“Just like people realized extranet was a waste of time, it was all about the Internet,” Barhydt said.

Proponents of enterprise blockchains like to point out that free-for-all cryptocurrency networks, like Bitcoin and Ethereum, face tremendous challenges in scaling up. They say these networks may never be able to handle the transaction processing demonstrated by private networks.

Barhydt isn’t persuaded by this line. He points to Robert Metcalfe, the creator of Ethernet—a technology known for knitting local area networks—who once predicted that the Internet would “go spectacularly supernova” in 1996, imploding thanks to an influx of traffic.

“Well, that was obviously wrong,” Barhydt says. The same will hold true of Bitcoin, he adds.

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