I’ve followed actual blockchain projects that didn’t really need blockchain but managed to yield some very good results by digitizing processes, by eliminating human error, and occasionally, by guaranteeing the integrity of data. And recently I read an article that put these observations into perspective – that blockchain is just a tool for digital transformation (a buzzword broadly meaning “doing things on a computer and more efficiently”). That rarely the distributed consensus is needed, let alone public ledgers. But that doesn’t matter, as long as the technology has lead to some processes being digitized and transformed.
And people are usually surprised that I have a blockchain-related company and I’m so skeptical at the same time. But that’s actually logical – I know how the technology works, what problems it solves and how it can be applied in a broad set of domains. And that’s precisely why I don’t think it’s a revolution. It’s a wonderful piece of technological innovation that will no doubt solve some problems much better than they were solved before, but it won’t be the new internet and it won’t change everything.
Doesn’t that skepticism hurt my credibility as a founder of a blockchain-related startup? Not at all – I don’t want to get a project just because of a buzzword – that’s not sustainable anyway. I want to get it because it solves a real problem that the customer has. And to solve it the right way, i.e. with the best technologies available. And blockchain’s underlying mechanisms are a great tool in the toolbox. Just not a revolution.
In order to be revolutionary, something has to bring at least 10 times improvement over existing practices, or make a lot of things possible that weren’t possible before. Blockchain is neither. I got a question from the audience – “well, isn’t it a 10 times innovation in payments?”. My counter-question was: “Have you ever bought something with cryptocurrencies?”. Well, no. It also doesn’t improve 10 times cross-organization integration. Yes, it might help to establish a shared database, but you could’ve done that with existing technology if you needed to.
But if the blockchain hype helped people realize that digital events can be protected, and that stakeholders can exchange data and present proofs to each other that they haven’t modified the data, who cares if the ultimate implementation will be based on Ethereum, Hyperledger, Corda, or just a clever use of digital signatures, timestamps and web services, or perhaps simply merkle trees.
I hope that blockchain gets demystified soon and we all start speaking the same language (so that I don’t need to reassure an audience at a banking summit that – no, we are not doing cryptocurrencies in our blockchain company). Once we get there, we’ll be able to efficiently solve the problems of digital transformation. As for the digital revolution – it is already happening. We are moving everything online. And yes, with centralized services rather than distributed p2p networks, but that’s not a technical issue, it’s a socioeconomic one. And technology by itself is rarely a solution to such problems.