Today, we announced that we have raised a $120 million Series D. If you’re already familiar with Digital Asset, you probably know us as being one of the leading companies in the category known as “enterprise blockchain”, particularly for the high profile projects with major stock exchanges. For those of you following us over the last 6 years, you may think we take a side in the permissioned versus permissionless, public versus private, false dichotomies that make for a good story. However, what most readers probably don’t know is that our vision has far more in common with public chains than it has differences. But how we believe the world will get there is very, very different.
Let’s take a step back. For a moment forget the technology, the nuances, the trends and the fads. What are we trying to achieve?
Across every aspect of our lives, our experiences are inhibited by inefficiencies. Some of these inefficiencies are immediately obvious, some we don’t notice until we have to experience them as they were before they were solved, some are buried so deep we can’t even identify them. But they are absolutely everywhere. You’ve experienced them first hand visiting the doctor, renting an apartment, or with something as simple as transferring money. The same information is inputted multiple times, kept up to date after the fact, you have to sign up for different services to transact with different people. Even in the era of mobile-first digital experiences, silos are everywhere.
These are possibly minor inconveniences. First world problems of modern life. But the same problems exist on a macro scale, a scale that can quite literally cause global financial crises. Now we’re not talking about individuals but institutions. One company doesn’t know what its obligations are, another doesn’t know what its risk exposure is. Compound that and we now face a scenario where incomplete information and fractured processes translate into major issues – where millions can lose jobs, and homes.
The root causes of both are the same. The underlying systems that the global economy is built on were designed in isolation with technologies that have no inbuilt notion of connectivity. Access control is spread throughout the stack, from the database through the middleware to the APIs, left to developers to implement correctly. Connectivity is bolted on after the fact as wrappers around antiquated systems or as predefined interfaces at the edges of applications, with no consistency guarantees in between. Even when data needs to be leveraged in other parts of the same organization, it often has to be replicated with no link back to the source.
And yet these are the foundations on which your entire business is built. Building new products and services, improving your customer experience, managing your risk, all rely on the data residing in these ultimate systems of record. You can’t be expected to innovate on a fragmented foundation. But your customers still demand seamless experiences. Regulators require changes to processes or disclosures that can have knock on effects throughout the data in your entire organization.
So what should you do about it?
So what do we replace them with? And more importantly, how do we go about doing it? Do we rely on the same outdated approaches that got us to where we are today? Do we start from scratch, relearn the painfully learned lessons and wait for everything to migrate? Do we create new, albeit slightly less inefficient silos around asset classes or groups of companies? Do we force everything onto a single ledger, whether that’s a single SaaS app, legal entity, or blockchain? Do we all have to hand over all our data to a third party to get a single source of truth? Could we have built the internet this way?
These are obviously rhetorical questions and yet so many approaches are doing exactly this. We can solve consumer payments if everyone uses Venmo, until someone is on CashApp. We can solve counterparty risk if everyone agrees to the same intermediary, until we need to use those funds to settle against a different asset class. We can make all assets interoperable, if only they all use the same blockchain. The world is far more complex than this. There is no one size fits all solution to combine everything under a single ledger.
So what is the way forward?
Our vision is for a world of countless systems, each powered by infrastructure that suits their own unique requirements. It may be something as simple as cash on a censorship resistant ledger. It may be an internal business process that doesn’t require decentralization and can be a collection of synchronized databases instead. It may be anything in between. They may need to connect for parts of the process that require the other. The properties that each require are not the same, and so they shouldn’t be forced to inherit them to interact. As long as they are truly interoperable, meaning it doesn’t matter what technology they are running on and no new single point of failure is introduced, it shouldn’t matter. This is how the internet, a network or networks by name, works, and so should the future of commerce.
We call this vision The Global Economic Network. ‘Global’ because it has no boundaries, geographic or logical, the edges of applications start to blur as they are composed into more complex systems. ‘Economic’ because it deals not just in replicating information but in value and scarcity; assets exist natively on the system and aren’t just moved around by it. ‘Network’ because it will not, and can not, be one instance or instantiations of a singular technology, but must be an interconnected group of heterogeneous technologies tied together with a common protocol.
But getting there is not simple. A vision is nothing without a plan. ‘Build it and they will come’ is not enough when dealing with the entirety of global commerce. Getting there requires a deep understanding of both where, and why, we are where we are today combined with a practical, incrementally valuable transition to get there. And the resolve not to let pragmatism distract us from where we need to go.
In part 2 we will explain how we believe we can get there, what we have already built to enable this vision, where we are going, and how you can contribute to, and benefit from, making it a reality.
Click here to read the press release.