Only one of the following pieces of news is true, but one day, it will all seem equally comical.

Address, 1896:

The owner of Wagoneer & Sons, a leading manufacturer of horse-drawn carriages, announced the adoption of a new machine called the “internal combustion engine” to improve the manufacturing process. “Gas engines are powerful, but dangerous,” said the owner. “We will use it to make better vehicles.

Address, 1918:

The American Candlemakers Association has announced a new initiative to electrify the candle-making process. She believes that using electricity is very dangerous for lighting but that it can be used to make cheaper candles.

Title, 1989:

The United States Postal Service will adopt a new technology called “the Internet” to speed up the sorting and delivery of letters and postcards.

Address, 2022:

The CEO of a major investment bank argues that blockchain, a technology invented to eliminate legacy middlemen such as banks, is best used by these middlemen to incrementally improve their outdated methods.

This final title is a summary of an editorial author By David Solomon, CEO of Goldman Sachs, who argues that private blockchains deployed by regulated brokers are more beneficial than cryptocurrencies. This is the latest iteration of the “blockchain, not Bitcoin” argument we’ve been hearing for years. It usually starts with a list of why things like public blockchains or Decentralized Finance (DeFi) Serious and ends with the conclusion that only incumbents should be allowed to use the technology. But that is not how history works.

Every transformative technology starts out as “ineffective and dangerous.” The oldest cars often broke down, and one of the first major uses of electricity was to execute prisoners. People and companies who initially adopt new technology also tend to be skeptical. Most car companies that appeared 100 years ago failed, and Thomas Edison used to electrocute animals to make his competitors look bad. But good technology that solves important problems wins anyway.

To be fair, there was a time when private blockchains were considered a useful, albeit insignificant, solution — not as a replacement for cryptocurrency but as a workaround that could develop in parallel. I would have told you three years ago, a bank can use a private network to reduce internal inefficiencies today while learning how to interact with the public tomorrow.

But I was wrong. Despite the tremendous efforts, the only thing the private chains have achieved so far are impressive headlines followed by even more impressive failures. I can’t find a single example of a corporate project doing something useful despite hundreds of millions of dollars invested in the lot. The list of epic failures is getting bigger every week.

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The first problem with any private network is the omission of the point of encryption, which is to eliminate intermediaries like banks and the fees they collect. Take cross-border payments, as multiple correspondent banks have been (supposedly) building private blockchains to to improve their internal transfers. The best correspondent bank isn’t any more efficient – it’s the bank you don’t need thanks to stablecoins.

This does not mean that banking will disappear. Even stablecoins will need someone to hold their reserves, and tokens often need custodians. But the more time big banks waste on private chain fantasies, the less likely they are to build useful crypto products.

In his editorial, Solomon argues that “with the guidance of a regulated financial institution like ours, blockchain innovation can flourish,” followed by “the invention of email has not rendered FedEx or UPS obsolete.” This is a wrong analogy. The best one is the US Postal Service, in terms of mail volume collapsed by 50%. Are you listening to Wall Street?

The second problem with any private network is slow development. In DeFi, new protocols are released frequently by random developers. Most fail (sometimes catastrophically), but thanks to the unauthorized nature of public networks, the redundancy is instantaneous. This is how we get generational breakthroughs like Uniswap, built on a $100,000 bounty—money less than the salary of countless bank executives working on the latest fictional private network.

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Bankers like to argue, “But wait a minute, what about regulations? We can’t dive headfirst into DeFi even if we want to.” This is correct. But it’s also their problem.

What these executives are really saying is that they expect their regulatory moats to protect them indefinitely. If every DeFi project had to first obtain a banking license, the pace of innovation in crypto would slow dramatically.

But this is not how the disorder works. With smart contracts and outcomes secured by crypto, DeFi will be safer than any bank. Riding on a global public network as transparent as Ethereum, access to it will be fairer than any financial system we have today. Regulators will come eventually.

It’s hard to know exactly what the future of public unlicensed will look like, but one thing we can be sure of is that it won’t look like how Wall Street does today. This is not how history works.

This article is for general information purposes and is not intended and should not be considered legal or investment advice. The views, ideas and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.