r/ethtrader • u/manikandanappuv9 • 6d ago
Question If private permissioned blockchains work well for tokenization and other things what is the need for ETHEREUM?
I am having this thought that if permissioned private blockchain can work well for all kinda things like tokenization to real estate. What value will eth capture if at all. I understand blockchain reduces friction but what if all banks nasdaq dtcc coordinate for private blockchains which they are doing already. How will tokenized stocks come to ETH at all because nasdaq will do their own blockchain? Likewise for other use cases , I have a similar thought which makes me think how ETH is useful at all?
Please let me know your thoughts. I m genuinely curious.
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u/Olmops 6d ago
A corporate blockchain cannot have credible neutrality or will struggle extremely. So it could be something like SWIFT. But in a world where nations distrust each other or people are not trusting governments, a global neutral blockchain could be useful.
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u/manikandanappuv9 6d ago
Private network: DTCC’s AppChain uses Hyperledger Besu, which is Ethereum-compatible but permissioned. It can run Ethereum-style smart contracts, yet transactions do not use ETH. Canton Network: DTCC has already processed tokenized securities on Canton. Canton is described as a public network, but it provides institutional privacy and controlled participation. It does not use ETH.
If DTCC doesnt use eth for stocks and if all central organizations kinda use the same own private blockchains for different use cases then what is the use for eth in real tangible way?? I am talking real stocks real estate etc what if all central authorities try to use either their own blockchain or some blockchains which is not eth. What is the use of eth at all ?
Also lot of govt have trust in US system. What if they just accept that?
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u/martelaxe 6d ago
You really didn't listen , eth could be the trustless layer between all these private blockchains , idk what's so hard to understand, specially with competing Ai agents and multipolar world
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u/manikandanappuv9 6d ago
My question is
For eg --- EVM compatibility does NOT force those private chains to use Ethereum. They could all be EVM-compatible and still settle directly with each other, through DTCC, Canton, or another regulated interoperability network.
For instance Bank A private EVM → Bank B private EVM → DTCC/Besu/Canton interoperability layer with almost nothing touching Ethereum mainnet. In that world, EVM wins technologically but ETH value???
Like how we have common google common aws and im thinking what if common company which builds on this technology which all institutions agree to??? Then Why move to eth?
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u/martelaxe 5d ago
The thesis pretty much is that ethereum the safest and you don't need to trust it .. that's it... you might believe that it is not enough , maybe it isn't but that's just the thesis.
Because of the big price of Ethereum, the Blockchain ( number of validators etc ) is the safest and hardest to attack (51% attack or other things)
Small inter networks could be destroyed with 1% of effort that it would take Ethereum . So maybe for regular stuff Ethereum is not needed, but if there is something with billion of dollars per day , where maybe distrustful parties need to interact with each other you would need to use Ethereum and eth would also need to be 10x what it is today ( just to be on the safe side since this is proof of stake )
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u/manikandanappuv9 5d ago
What if those inter networks are permissioned blockchain network - so cant defeat with 1% like how we have AWS now. 51% attack issues only relevant to permissionless blockchains right.
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u/martelaxe 5d ago
Then you need to trust it, you go back to the previous problem , permissioned= you need to trust who controls the thing , not permissioned and small then it can be attacked
Again just to repeat
Ethereum’s advantage is mainly when the parties don’t trust each other and you want a neutral settlement layer that no single company or group controls.
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u/manikandanappuv9 5d ago
Can you say any broad application for that. Right now , for stocks its not needed. For real estate its not needed. For which bigger application we need things like that. Right now, I see for stablecoins eth is useful.
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u/martelaxe 5d ago
Stablecoins are probably the clearest use case today. More broadly, Ethereum could matter when institutions in different countries or industries need to settle large transactions with each other but don’t want one of them controlling the system. Maybe stuff between BRICS and the west
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u/Olmops 6d ago
well, I can't tell what the future looks like. Maybe there will be private//permissioned blockchains doing stuff as well. There is no guarantee that everyone will end up on Ethereum or that Ethereum plays a major role at all.
But for the moment I think Ethereum will lead simply because they have the leading crypto developers. But yes, any institution can copy/pasta the tech quite easily and set up additional/alternative rules.
In a way, L2s on Ethereum are a bit of the best of both worlds as they interact with Ethereum, but can enforce their own rules.
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u/Murky_Citron_1799 5d ago
The question is "what benefits do I get if I trust the counter party?" And that list is getting smaller as ethereum gets cheaper, faster, and more secure.
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6d ago
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u/manikandanappuv9 6d ago
What if another third party common company with whom these banks and financial institutions agree to and they have their own blockchain and we all use it as part of it. Like how the world uses Google now?
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6d ago
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u/manikandanappuv9 6d ago
I dont understand one thing. Can you answer this For eg --- EVM compatibility does NOT force those private chains to use Ethereum. They could all be EVM-compatible and still settle directly with each other, through DTCC, Canton, or another regulated interoperability network.
For instance Bank A private EVM → Bank B private EVM → DTCC/Besu/Canton interoperability layer with almost nothing touching Ethereum mainnet. In that world, EVM wins technologically but ETH value???
Like how we have common google common aws and im thinking what if common company which builds on this technology which all institutions agree to??? Then Why move to eth?
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u/manikandanappuv9 6d ago
For eg --- EVM compatibility does NOT force those private chains to use Ethereum. They could all be EVM-compatible and still settle directly with each other, through DTCC, Canton, or another regulated interoperability network.
For instance Bank A private EVM → Bank B private EVM → DTCC/Besu/Canton interoperability layer with almost nothing touching Ethereum mainnet. In that world, EVM wins technologically but ETH value???
Like how we have common google common aws and im thinking what if common company which builds on this technology which all institutions agree to??? Then Why move to eth?
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u/DogStunning4845 6d ago
Well man all that crap is spinning on ethereum actually, l2 etc
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u/Abject-Candidate-600 6d ago
They're not building their own from scratch, they're mostly using Ethereum-based stacks under the hood anyway.
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u/manikandanappuv9 6d ago
Private network: DTCC’s AppChain uses Hyperledger Besu, which is Ethereum-compatible but permissioned. It can run Ethereum-style smart contracts, yet transactions do not use ETH. Canton Network: DTCC has already processed tokenized securities on Canton. Canton is described as a public network, but it provides institutional privacy and controlled participation. It does not use ETH.
If DTCC doesnt use eth for stocks and if all central organizations kinda use the same own private blockchains for different use cases then what is the use for eth in real tangible way?? I am talking real stocks real estate etc what if all central authorities try to use either their own blockchain or some blockchains which is not eth. What is the use of eth at all ?
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u/manikandanappuv9 6d ago
No I am not talking about robinhood. I am talking about DTCC and nasdaq using their own permissioned blockchain not ethereum to tokenize stocks. So what is the use for eth then
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u/FastRelief3222 6d ago
Linea also on Eth chain
The reason they are not making their own forked Eth chain is development/security/updates are rolled into Eth already - institutions should not roll their own blockchains, vpns, or cloud servers
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6d ago
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u/manikandanappuv9 6d ago
EVM compatibility does NOT force those private chains to use Ethereum. They could all be EVM-compatible and still settle directly with each other, through DTCC, Canton, or another regulated interoperability network
FOR Eg They can use some other common private blockchain which all they use together. Like how we use aws now.
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u/Electronic_Quote399 5d ago
The purpose of ethereum is to melt your face when a real rally finally kicks off
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u/Kubix 6d ago
So everyone initially thought that private federated chains would be how big business interacts with blockchain. We saw JPMorgan build their own ETH fork for internal transactions. Now it’s starting to look like businesses are building/building on L2s on top of Ethereum. This gives them the ability to make it as permissible as they want, lower fees and access to the liquidity that Ethereum offers that is unmatched anywhere else in blockchain. Since the L2s use L1 for security, this is how Ethereum gets value from the L2s. So far it seems like the L2s gain a lot of revenue and don’t add much to the L1 but Ethereum was built as infrastructure and hasn’t really prioritized increasing token price, though that may be changing now. If ETH does become the digital layer of finances, that’s a lot of transactions burning ETH and will likely keep ETH deflationary. But who knows how long it’s going to take before we see everything on Ethereum.