Blockchain is everywhere, but is the technology overhyped?
SPOILER ALERT: I am definitely not anti-technological advancement and I am not anti-blockchain, but my experience confirms the view of Bill Gates et al that we tend to overestimate the potential of change in the short term and underestimate its impact in the longer term.
I am sure that in 10-20 years time there will be many instances where the blockchain, smart contracts, NFTs, etc will be integral to better solutions and that in turn the worlds of finances, creative arts, and medicine, to name just a few, will have changed significantly. My issue today is with the dogmatic stance taken by a good number of people in relation to the current “hot tech”; a position that closes out challenges and stifles effective discussion.
Recently I have noticed a theme in some of my (professional?) conversations with them ending with me being told that I don’t “get it”. The “it” being crypto currency, NFTs, the metaverse, Defi (decentralised finance), etc.. I have been told it wasn’t my fault, e.g. that being “wired” for TradFi (traditional finance) was the reason I don’t get Defi!
This jarred with me as I believe I am extremely curious and not a Luddite. I have lived through, embraced, and in no small part driven significant change during my lifetime, professionally and personally. I also believe that I have the intellect to tackle pretty much anything I encounter. If I can deal with relativity, black holes, and space/time questions, there is no shortage of brainpower to be applied to these technical propositions.
So, I started looking into the situation more analytically and I found some common threads.
The bits I am told I don’t get are all underpinned by the desire for/promise of:
· The disintermediation/democratisation of processes/transactions
· A new(?) form of trust built on mathematics
· The immutability of digital records
Underpinning all that is a (blind?) dedication to blockchain technology.
It has all started feeling a little cultish. There are those who believe there is but one answer and that answer is blockchain and all that will be built upon it. To them, all that is old is bad, especially in the world of finance.
And then there are those that feel the blockchain is but part of a set of tools/solutions and other options should be considered, rather than discarded out of hand.
I have drafted (a little tongue in cheek) something I am calling “The Blockchain Doctrine”. Belief in this is what seems to be dividing views and there seems to be a binary position – one is totally “in”, or one is out.
It feels as if one needs to kneel at the altar of Blockchain and unquestioningly embrace each point in order to be accepted. This is where I stumble and fall on the road to enlightenment.
In case it helps, a slight expansion of the doctrine could be:
· The future is disintermediated BECAUSE the middle man rips you off
· Trust will be based on clever maths BECAUSE while opaque, trust me these algorithms are more reliable
· Digital records will be immutable BECAUSE it is not currently worth the effort to steal from the system
· Democratisation is the answer BECAUSE everyone can protect their own interests
· Regulation is NOT required BECAUSE this just constrains progress
· The future will be built upon Blockchain BECAUSE it is the only way forward
· All other views are invalid BECAUSE they just are!!
My aim is to promote genuine constructive discussion and in future articles, I plan to expand on my thinking around each of the points. To do so now would make this post too long, so please stay tuned.
Readers may want to add more points and I am happy to take suggestions/comments.