‘Corpo chains’ doomed unless they embrace crypto’s ethos: StarkWare CEO

Blockchains created and controlled by corporations will eventually die, as users won’t want a chain controlled by a central entity, according to Eli Ben-Sasson, co-founder and CEO of blockchain company StarkWare.

Ben-Sasson said in a Monday post to X that he was doubling down on his opinion that “corpo” chains won't last because they are not aligned with a fundamental concept of blockchain, which requires them to get “rid of their position as a central entity.”

“The important element of blockchain is a system that gets rid of a central entity. It comes at a cost: A very complex technology that’s hard to build and hard to use. Even if we apply AA to create simplified UX, the tech under the hood is still very complex,” he said.

Source: Eli Ben-Sasson

Bitcoin, the first cryptocurrency, was designed to disrupt mainstream financial institutions and give financial power back to individuals.

This may be why some crypto community members have been apprehensive of new blockchains such as Stripe’s new layer-1, Tempo.

Corporations will back off if user take-up is low

Ultimately Ben-Sasson said it’s great that corporations want to adopt blockchain technology because it means “blockchains are no longer this scary thing anymore.”

In response to an X user's question, he also agreed that in the short term the chains from large financial giants could help mainstream adoption.

However, he predicts that in a few years the blockchains built by these companies will most likely be abandoned when they “cause too big a headache from a technical point of view,” and after users choose to avoid them because they aren’t attractive enough from a “DeFi/self-custody/control-my-asset point of view.”

“Fast forward a few years: Corporate chains will end up with the complex tech but without the added value for users, which is no central entity to control them. At that point, these chains will lose the focus from corporates.”

Community split on future of corporate blockchains

Meanwhile, an X user under the handle Boluson argued that most corporations don’t need a blockchain; they are just feeling pressured to adopt the technology over fears of being left behind.

Related: How Bitcoin’s three pillars are about to fix money — StarkWare CEO

“Not every project in Crypto needs to have blockchain, now everyone wants to build something around creating a blockchain,” they said.

Rob Masiello, the CEO of Sova Labs — a firm focused on building Bitcoin-native infrastructure — said he thinks “corp chains” will be successful and useful for the companies that own and run them.

“Users just won’t have any way to participate in their upside. Base is an example,” he said.

Other users speculated that corporations might create blockchains but then hand the reins to native firms or look to acquire existing blockchains and then scale them up to purpose.

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