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Reasons to be cheerful, blockheads

I wrote my blog the other day with the title Why I’m fed up with blockchain.

It amused me to see how much backlash it created, particularly on LinkedIn where there are over sixty comments as of today. In fact one guy called Ajit even wrote a blog about my blog.

It didn’t surprise me, as I wrote it on purpose. In fact, the opening words were: I’m winding people up with blockchain, and it did wind people up. Good.

The commentary back to me fell into two camps: those who believe blockchain has over-promised and under-delivered and those who don’t.

Those who are in the former camp include people like Grant Colhoun, CEO of Okanii

Nice to see an article that addresses the elephant in the DLT room. I have been publicly saying for 10yrs that DLT systems are good for some use cases but utterly useless for others and the single worse use-case for DLT is retail payments, yet 99% of the 7-8k DLTs out there are focused on payments.

This is backed up by Amir of Acent AG

Chris, compelling blockchain use-cases are as rare as pure diamonds. And in case you spot one, you might find out it was a Marketing use-case only.

And Martin Sewell, a Quant guy

The blockchain is an ingenious solution to a technical problem, but it is also a solution looking for a real-world problem.  Any system that has any dependency on data in the real world requires a trusted third party to validate the data, which renders a blockchain pointless.  A database would be much more efficient.

Those who disagreed include Sonja from the Web3 Foundation

You write: ” Issues that require agreements between industry, finance, government and citizens. Issues like digital identity and cross-border processing. These are not issues that are solved by one entity. They involve multiple entities across borders and geographies. That is why blockchain has disappointed.” ………………………………………………………………………………………… One should not forget why the Bitcoin protocol was written. It was not meant to be a fluffy-bunny, novel form of money. It was geared to act as a monetary patriot, seeking to incite political change through crypto-anarchy. It was the first iteration of absolute freedom—the first hint of peaceful anarchy. Therefore, technology purposes should not be rendered obsolete in the smokescreen of political correctness and governmental kowtowing.

And Iqbal, who Chairs the UK Crypto Association

Blockchain allows us to exchange value between two entities which do not trust each other. With money there are  a few things one can do, buy goods/services, exchange for other forms (fx), send it to others (remittance), trade with it, invest it, save it, lend, borrow and insure.

The blockchain was designed for individuals to do this with each other. The first use case being able to buy Bitcoin(FX). Post this platforms are being developed, where you can lend to each other, borrow from each other, trade and invest with and against each other, without a trusted third party. All of this takes time.

We need to stop negating a technology just because 10 years after we have no use case. We didn’t have e-commerce for decades post the arrival of TCPIP, even a use case for E=MC^2 took time….

Oh, and that Ajit guy

It’s not my fault that you’re hanging out with the wrong crowd and reading glossy reports instead of playing with Dapps on the internet?

I guess the two comments I liked the best were from Krzysztof of Oracle who thinks …

This will age poorly

and Efi, a FinTech influencer

May I rephrase:

“ Issues that require agreements between industry, finance, government and citizens. Issues like digital identity and cross-border processing. These are not issues that are solved by one entity. They involve multiple entities across borders and geographies. That is why blockchain has disappointed”

To

“Blockchain technology is a governance technology. It is our choice and responsibility to deploy it towards addressing all the issues that matter (i.e. require consensus).”

The reason I like the last comment is the use of the word consensus. Because blockchain is a consensus technology, it will take time for its use cases to really make a difference.

I would love to highlight all the comments but, as it did stir up the honeypot, recommend you clickthrough and read the comments yourselves over on LinkedIn and make your own mind up.

Meantime, what most of those who disagreed with me missed, was my closing paragraph in the blog:

Why would I claim that a technology that has received $24 billion in investments since 2013 is a waste of space? Well, I’m not. It’s not a waste of space at all. It is a powerful and compelling technology.

In other words, instead of talking about a waste of space, what I’m really saying is watch this space. It’s the future of our world. It just takes time.

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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