The genius of Tim Berners-Lee when he invented the World Wide Web back in 1989 was that he brought together three arcane technologies (hypertext, markup languages and internet communication protocols) in a way no one had thought of before and literally transformed the world. Could blockchain do the same thing? Satoshi Nakamoto in his paper that introduced the world to bitcoins 20 years later in 2009 also used three existing ideas (distributed databases, public key or asymetric cryptography and proof-of-work) to show how a peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.
Depending on your point of view, and personal agenda, blockchain the technology that underpins Bitcoin, either promises to do no less than solve the world’s refugee crisis and transform the management of health supply chains or is the most over-hyped, terrifying and foolish technology since Google Glass or MySpace. Like any new technology we need to be very careful to separate the hype from the reality.
The documentary The Blockchain and Us made by Manuel Stagars in 2017 interviews software developers, cryptologists, researchers, entrepreneurs, consultants, VCs, authors, politicians, and futurists from around the world and poses a number of questions such as: How can the blockchain benefit the economies of nations? How will it change society? What does it mean for each of us? The intent of the film is not to explain the technology but to give views on the it and encourage a conversation about its potential wider implications.
Since I have begun to focus my architecture efforts on blockchain I often get asked the question that is the title of this blog post. According to Gartner blockchain has gone through the ‘peak of inflated expectations’ and is now sliding down into the ‘trough of disillusionment’. The answer to the question, as is the case for most new technologies, will be it’s “good for” some things but not everything.
As a technologist it pains me to say this but in the business world technology itself is not usually the answer to anything on its own. As the Venture Capitalist Jimmy Song said at Consensus earlier this year*, “When you have a technology in search of a use, you end up with the crap that we see out there in the enterprise today.” Harsh words indeed but probably true.
Instead, what is needed is the business and organisational change that drives new business models in which technology is, if required, slotted in at the right time and place. Business people talk about the return on investment of tech and the fact that technology often “gobbles up staff time and money, without giving enough back“. Blockchain runs the risk of gobbling up too much time and money if the right considerations are not given to its use and applicability to business.
If we are to ensure blockchain has a valid business use and gets embedded into the technology stack that businesses use then we need to ensure the right questions get asked when considering its use. As a start in doing this you could do worse than consider this set of questions from the US Department for Homeland Security.
Many blockchain projects are still at the proof of technology stage although there are some notable exceptions. The IBM Food Trust is a collaborative network of growers, processors, wholesalers, distributors, manufacturers, retailers and others enhancing visibility and accountability in each step of the food supply chain whilst the recently announced TradeLens aims to apply blockchain to the world’s global supply chain. Both of these solutions are built on top of the open source Hyperledger Fabric blockchain platform which is one of the projects under the umbrella of the Linux Foundation.
What these and other successful blockchain systems are showing is actually that another question should be tagged onto the flowchart above (probably it should be the first question). This would be something like: “Are you willing to be part of a collaborative business network to share information on a needs to know basis?” The thing about permissioned networks like Hyperledger Fabric is that people don’t need to trust everyone on the network but they do need to agree who will be a part of it. Successful blockchain business networks are proving to be the ones whose participants understand this and are willing to collaborate.
* As discovered in the Medium.com post Firms need business model change, not blockchain.