Exciting news arrives from a friend. “Check this out” he tells me, “they’re using the block chain to replace the Pound Sterling / create a land registry in Ruritania / cure cancer” (*delete where applicable) and there’s a URL attached. I click on it. It says that a company has signed a memorandum of understanding to create a working group to examine the possibility of a pilot to use a database that has the “potential seamless integration with blockchain technologies”. I emailed him back, pointing out that my backside has potential seamless integration with blockchain technologies but that doesn’t make it a blockchain.
How many times has this happened over the last few weeks? It’s getting out of control. A client tells me that one of their competitors is using bitcoin to manage some asset or other. I look at the website that she points me to. What it actually says is that the competitor is looking at a “bitcoin-inspired” system (what you or I might term a “database”). Then I go to another meeting where someone says that the blockchain could be a potential solution to a particular problem, but says it in such a way as to drive suspicion that they don’t know what a blockchain is. But of course, because I’m English, I say “that’s an interesting idea”.
It seems to me that in a relatively short time the word blockchain has become detached from its technological roots and from its location in the spectrum of shared ledger implementation options to become one of those almost generic chromewash terms, like “big data” or “cloud” (there is no cloud, remember, it’s just somebody else’s computer) to deliver a superficial veneer of futurism.
I happened to be at a seminar on financial services recently and there was a presentation about the use of the blockchain to deliver lower costs, or something or other, in a particular area. The guy who was sitting next to me, who I think was from a bank, wrote “magic beans” on his notepad. What an accurate description.
There’s always hype around new technologies, we all understand that. But in the case of the blockchain, the hype seems particularly merciless and quantitatively different. Why? I honestly don’t know, but it must somehow be related to its association with bitcoin and the creation myth associated with it. Why else would otherwise sensible people tell me that they read that a bank is using the blockchain on the basis that they saw someone from that bank talking at a conference about exploring “blockchain compatible” (a meaningless phrase) options?
Personally, I think the shared ledger concept and the associated technologies for establishing communications, consensus, content and contracts between multiple organisations (and, more importantly for financial services, regulators) is one of the most interesting new developments in the sector in my career. My old friend Ian Grigg, who really does know what he is talking about, hypothesises that the blockchain is not the right solution for technical reasons but because everyone has agreed it is (a Reed’s Law spiral), but I think it’s too early to call that.
There is no doubt that the blockchain is a particularly interesting way to implement one particular kind of shared ledger, and there is no doubt that there is tremendous creativity unleashed from the permissionless innovation environment, but it’s a big step from that to ending world hunger.