Blockchain: Buzzword or A Whole New World?

In my previous article, I explained how I transitioned from being a crypto-skeptic to a blockchain enthusiast in 2017. I changed my position after realizing the potential of the blockchain technology to significantly transform the worlds of finance, business and value exchange. But as I did more research and sought to understand the blockchain, I faced the blockchain enthusiast’s first challenge: separating the truth from the hype.

A career accelerator and an open playground

There was already a lot of material online related to the blockchain at the time. For the previous 3–4 years, people from all kinds of academic backgrounds and walks of life wrote and taught about the blockchain. I am surprised that even I get to write about the blockchain technology after only being involved with it for less than a year. But this is apparently the current situation of the blockchain technology; since few people know it in depth, you could become an “expert” within months and start training others. That is why I secretly nickname the blockchain ‘the career accelerator’.

The truth is that the blockchain is a new technology which has not been standardized yet. Take a look at the definition for example; people still struggle to find one universal definition for the word blockchain. Besides, ever since Bitcoin was invented in 2009, many different types of blockchain projects have been launched and rarely is one identical to the other. The open-source nature of the technology and its popularity make it the favourite playground of ambitious explorers and would-be world changers. This is visibly at the expense of rigorous researchers.

Will the real blockchain experts stand up?

Anyways, there were still tons of resources available for my own personal research. I started by learning from people who worked with the technology: reading stories on the Medium, following tutorials on how to create DApps (blockchain-based applications), chatting with colleagues, collaborating on mini-projects on the Ethereum platform and the NEO ecosystem, etc. My little personal research would usually take me a few hours a day after work. Thanks to the blockchain online community, I eventually gained some understanding of the unique technical features of the blockchain.

However, some questions can only be answered by actual researchers. For example, there is always one challenge for the blockchain consultant: determining when the blockchain should be used or not. Many blockchain projects I heard about simply sounded unnecessary. If I was going to work on the blockchain, I had to avoid doing blockchain for the sake of blockchain. And I needed researchers or business leaders to help me understand which types of problems the blockchain was actually designed to solve.

I eventually came across a few subject matter experts. One of them was Don Tapscott, founder of the Blockchain Research Institute. Blockchain Revolution, a book dedicated to the topic he co-authored with his son Alex Tapscott, was eye-opening. As the title suggests, the authors argued that the blockchain could profoundly transform the way the world exchanges value. As they phrased it, after the Internet of Information and the Internet of Things, we finally had the “Internet of Value”. For those who want to learn about the blockchain as an agent of global disruption, the book is a great starting point.

Skipping the middleman

But for those of us who simply want to know why we would ever want the blockchain in our lives, here is my short answer after reading Blockchain Revolution: you use the blockchain when you want to skip the middleman.

Who is the middleman? Generally, any institution standing between you and other individuals in order to authenticate your identities and to operate transactions of value and information between you and them. Following different scenarios, the middleman can be an intermediary bank, an insurance company, the government, Western Union, Google, AirBnB, Facebook, Amazon, etc. You generally trust the middleman — at least enough to provide them with some of your personal information.

Source: https://medium.com/@Joebg002/will-smart-contracts-be-the-death-of-the-middleman-7cba39987282

Why take out the middleman? For many different reasons. The middleman can be expensive to maintain. He may be greedy. He might be intrusive and collect more of your data than you would like him to. He may threaten some of your personal freedoms. He may simply be logistically slow. Or maybe you just don’t trust him. Whatever problem you may have with your middleman, the blockchain is here to help you get rid of him. This is a big deal — big enough to create a buzz. But one question you need to ask is: “should we actually take out the middleman”?

One buzzword and a lot of questions

This is the question that seemed most critical to me after reading the book. Contrary to a lot of folks I heard on this topic, I believed the answer was quite complicated. Yes, governments and corporations can be corrupt and intrusive. Yes, financial institutions may slow down your transactions and charge fees. No institution created and controlled by human beings is perfect. But rather than throwing away the whole system, a better approach may be to fix or improve it. And no one knows whether eliminating the need for trust in our governments, banks, and corporations will change our societies for the better. We can be sure, however, that the blockchain cannot always be the solution.

The truth can hurt.

Moreover, the blockchain technology is still under development. Scalability is definitely one of the major issues. The best public blockchains are currently struggling to handle effectively their volume of transactions and some of them are expensive to run and incredibly energy-consuming. As beneficial as the blockchain could become in the future, it really seems like it has been more helpful to criminals and lucky speculators than anyone else. The blockchain is clearly not living up to the expectations yet.

One of the unfortunate things with the blockchain space is the fact that many actors fail to answer the difficult questions. Because the short-term rewards are sometimes more appealing than the long-term benefits, many can’t see beyond high risk ventures like crypto-investments and ICOs. Few are considering the impact (positive and negative) that the technology could have on businesses and communities if implemented and used. While overhyping the blockchain, we downplay its need for research, development, and regulation. As a result, blockchain enthusiasts can sometimes feel all they have is one buzzword and a lot of questions.

Conclusion

Nonetheless, many new exciting blockchain projects have been launched since 2017. I am myself currently working on an interesting proof of concept and will be happy to share more in the future. Indeed, one problem with new technologies is that they raise a lot of questions. But this uncertainty is also what makes them exciting and drives people to start exploring. A good friend who works in the blockchain space once told me: “with the blockchain, the sky is the limit.” Because we don’t know just yet the future impact of this technology, we are naturally getting excited and imagining a whole new world right around the corner.

Two typical blockchain enthusiasts.

I am sure the blockchain and its consensus technology have an important role to play in the future. However, the challenge for blockchain professionals, researchers, and enthusiasts will be to adjust it to the real needs of their communities and to walk away from the numerous scams and irrelevant initiatives out there. I believe the first step is to understand the technology itself. So my next article will explain how the blockchain works. Stay put!

Helpful resources:

• https://coincenter.org/entry/open-matters
• https://www.blockchainresearchinstitute.org/
• https://bitcoin.org/bitcoin.pdf