If you’re like me, you maybe half understand how blockchain technology works, suspect it’s way overhyped, and associate its main application with buying drugs online.
And I’m guessing you're a lot like me!
Meanwhile, at the other end of the spectrum are the people who have become absurdly wealthy amid the cryptocurrency frenzy, or who are enthusiasts of the technology behind it and are eager to advance blockchain to more widespread and exciting applications.
Among the true believers are the founders of Ripple, a blockchain technology firm founded in 2012 and lately near the forefront of a lot action. The company is flush enough, and forward thinking enough, that it just committed $50 million to expand academic research on the subject. In the process, it's looking to move the technology and its potential financial applications out of the very early stages, and maybe out of the dicey reputation I mention above.
That translates into a nice chunk of cash for 17 universities to study any aspect of the technology they choose. It’s also a shrewd business move for the company.
Ripple is one of the breakout firms working in this space, using blockchain technology—decentralized electronic databases that record online transactions—to help financial institutions make global payments. Ripple is also associated with, although technically independent from, one of the largest cryptocurrencies, XRP. Out of the hundreds of cryptocurrencies, the virtual money made possible by blockchain, the most popular is Bitcoin. (There are so many two-minute explainers, but here is one.)
Interest in Bitcoin and cryptocurrency is surging right now, although much of the hype has been around the small number of eccentric characters (a lot of libertarian dudes) making money, and the anonymity that has made crypto useful for illegal transactions. And of course, there are many skeptics (see Vox, “Why Bitcoin is bullshit…”).
But cryptocurrency hype aside, there is a lot of interest in blockchain technology itself, largely in the financial industry, but also related to other potential, some say world-changing, applications in digital privacy or secure exchange of information.
And there is a growing number of intersections between the cryptocurrency boom and philanthropy. Most notably, the anonymous donor "Pine" recently went on a giving spree aimed at spreading around a sizable fortune made in this new Wild West.
Which gets us back to the $50 million (yes, it’s regular old dollars) in research grants by Ripple, which are serving a few purposes. For one, the use of blockchain and crypto technology is still in its infancy and faces a lot of tech challenges before it can be adopted widely. There are also huge questions about how blockchain fits into financial regulations and other legal boundaries. Academic research at top-notch schools could help the technology work past these hurdles.
There’s also the matter of maturing the field of people working on blockchain. Ripple’s team cites a desire to boost the workforce in this arena. In this regard, this commitment is not unlike the several artificial intelligence research partnerships that have cropped up between industry and universities. Companies are seeking to build and recruit talent, and schools are eager to expand their programming to meet the interest.
Finally, there’s a matter of adding legitimacy. For Ripple, this donation and others that are likely to follow could serve to mainstream the technology the company is staking its future on, and maybe improve that dodgy reputation. By publicly building connections with academia, and increasing the level of scholarship around blockchain, Ripple’s likely hoping it will make today’s skeptics one day seem like the people who doubted the internet would catch on.