“Blockchain is set to revolutionise the world,” they said.
Except, it isn’t – or certainly hasn’t, yet.
Now, two years after blockchain became a watchword in offices across the globe, blockchain technology is currently being slowly and methodically sifted through for its true value.
For instance, there have been notable (often large or global) enterprise blockchain applications that have been valuable, successful, and made good on their promises. However, the realisation of its compromises over time has seen blockchain tech lose its glamour, but persist fervently just beneath the surface of many corporations. Slow speeds (often infuriatingly slow in comparison to existing methodologies) are diminishing the transactional value of blockchain, yet corporates have taken to poring over any potential cost saving in blockchain application as though it were a treasure map.
Blockchain developers are still highly sought after but, much like Bitcoin, misinterpretation and overexuberance about blockchain tech have diminished. Current spectators are looking for the bare asset, stripped of its furore. Most previous predictions around blockchain tech were apt and, indeed, many of the mooted changes blockchain would enable are still being investigated or developed today. Additionally, the IoT would ostensibly offer an ideal problem for blockchain – the solution – to address.
This coupled with slow transactions, unfamiliarity, and the political challenges often inherent to the technology, unfortunately, as industries evaluate the concept, many are overturning blockchain’s application after realising blockchain tech would bring no improvement to the current way of doing things.
Blockchain is a Later Blooming Child
The current discourse around blockchain tech is: where it works, it truly liberates. In other words, where blockchain finds its ideal application, it can be sublimely good.
Although the enterprise is fawning over “partially decentralised” blockchain – ‘the blockchain that wasn’t’ – there have been industries like global shipping that have been genuinely elevated through its application.
Much like the internet very rapidly became an avenue of commerce, blockchain, too, has been wilfully perverted by the enterprise into something ‘less than’. Indeed, consultants like EC-MSP are frequently asked to implement “blockchain solutions,” even though many corporate ideas around blockchain tech concern “semi-centralised” or “partially decentralised” blockchain applications. Blockchain is, by its very nature, wholly decentralised and a completely different method. The vision of eliminating entire cost centres that blockchain technology first intimated, however, is a powerful lure for any enterprise.
The traditional autocratic power structures of industry clearly aren’t ready to relinquish much of the old school protocols. Having to accommodate such non-concepts as “partial decentralisation” in the name of blockchain results in minor shuffling in the pyramid of power, rather than any new, more effective and efficient methods where blockchain’s smart contracts are applied directly to resolve issues or effect efficiencies.
Often best suited to business situations involving a host of company branches, dealing with a diversity of suppliers, and handling everything from toothpicks to perishables, blockchain’s initial promise does remain, despite confusion-causing lethargy. Many anticipated revolutions haven’t happened, but when big players like Walmart and IBM are pushing for blockchain’s implementation, it’s only a matter of time before successful working models become a part of daily life. Although critics have noted Walmart’s “blockchain” application could simply be described as merely a more participatory supplier database, blockchain’s value will emerge and grow as developments like these continue.
Often twisted by banks seeking efficiency that could lower costs, blockchain applied to the fintech sector would carry many benefits for consumers. The smart contracts inherent to blockchain tech do have innate value in a myriad of imaginings, as Ethereum has been demonstrating since 2013. Applying blockchain’s smart contracts to the interface between the consumer and the legal, banking, insurance and even healthcare fraternities can not only save costs all around but also make those services more accurate and effective while making life easier for consumers.
The definition of a blockchain is still elusive
Perhaps a principal reason why blockchain tech has fragmented as often as it has succeeded, is that blockchain terminology definitions have become meaningless. An entire lexicon of misunderstood concepts around blockchain technology dots the current landscape, making the extraction of real value elusive. Several misconceptions surround blockchain technology, adding to the misunderstanding and disappointment that often ensues after a company has investigated its application to no real net gain.
While the Bitcoin blockchain is the original chain, it’s often overlooked that Bitcoin has its own specific needs in transactions involving digital currency. In other words, Bitcoin’s blockchain has defined blockchain technology – along with Ethereum – for years now, but that might be more of a convenience than logical thinking. Amid widespread disagreement over which attributes are essential in order to define a process as “pure” blockchain technology, there remains no universal definition of a blockchain.
Google describes a blockchain as “a digital ledger in which transactions made in Bitcoin or another cryptocurrency are recorded chronologically and publicly.” Commentators note that although broad consensus exists around the fact that a blockchain is logically a digital ledger, a great many blockchain applications are not dealing with a symbiotic cryptocurrency, nor are they a matter of public record. The definition doesn’t hold.
Even assuming that a blockchain is a decentralized and public ledger of transactions is difficult, as many blockchains are not public, and many are anything but decentralised. Notions of blockchain facilitating “many parties” in an untrustworthy environment can also be superfluous, as a blockchain might be wholly in-house with only one party. Is such a blockchain then still a blockchain, or merely a shared database?
Perhaps the poster child for blockchain in 2020 is Mastercard. The company has developed and built its blockchain application, yet it remains mothballed, on the shelf, as all payments are still processed via legacy protocols. Indeed, Mastercard’s blockchain seems only able to be used for marketing purposes – a just-in-case and nice-to-have project – as no real-world application has ensued.
Personal data privacy concerns are also appearing on the blockchain developer’s monitor. In line with constantly increasing privacy regulation from legislators the world over, work is being done to investigate whether and how consumers might be able to delete their data on the “immutable” ledger that blockchain is supposed to be.
With “private blockchains” that are really nothing but legacy protocols and technology masquerading as a disruptive blockchain, and no clear definitions or standards yet forthcoming from the IT industry at large, blockchain tech’s innate value (it seems) will have to be tested case study by case study. While not wholly a bad thing, perhaps it was inevitable that blockchain technology had to lose the hype, gain definition and real, beneficial application, to more slowly emerge as the potential game-changer it remains.
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