My post-blockchain-conference scepticism

Ben Snaith
Sep 7, 2018 · 5 min read

Blockchain is the latest development buzzing around the tech and policy world. There is a belief that distributed ledgers (of which blockchain is one example) can help solve many issues facing sectors across the world, from healthcare to voting. Demands and expectation of the still-experimental technology are sky high, but is it time to temper those expectations?

Cart before horse?

Earlier in the week, I attended the OECD Blockchain Policy Forum in Paris with my colleague, Peter Wells (on Medium here). The conference ‘Distributed Ledgers: Opportunities and Challenges’ brought together policy experts, technologists, business leaders and politicians from 70 different nations — including David Burt, Premier of Bermuda, and Ana Brnabić, the Prime Minister of Serbia.

Briefly, what is blockchain?

Blockchain, a form of distributed ledger, is perhaps the most hyped technology at present. There is sadly no easy definition or explanation, a quick Google search returns articles promising to explain it in no fewer than 10 (ten) minutes. For anyone interested, this is the best brief(ish) explainer I have found — for a more detailed exploration there is also the ODI blockchain report.

There is no lack of ambition

The sheer volume of current problems and crises it is purported that blockchain will solve, or sectors it could improve, is certainly impressive. Session topics at the conference included exploring how blockchain can be used in healthcare, migration, supply chains, currency, financial services cybersecurity, identity, water management, transport, energy, agriculture, illicit trade (how to decrease not increase it) and tax (I’m assuming this was how to maintain tax systems, not avoid them). There truly is no limit to its potential in the eye of the beholder.

Self-professed ‘blockchain evangelist’, Loretta Joseph, asserted confidently that within the next 10 years the blockchain infrastructure will be as important as the internet itself. She may be proven right — she clearly knows a lot more than me in this area — but the grandiosity of her, and others’ predictions, only increases the already sky-high expectations before its real world application has been truly proven.

My scepticism (or agnosticism) in the technology’s real world application wasn’t shared by many of the attendees, as shown below.

A poll sent to attendees

Working examples are thin on the ground

Across the conference, there were many ideas on how blockchain may be used in the future, but actual adoption of the technology on a practical level is currently very limited. It has been demonstrated to have been relatively successful for crypto-currency (so far) and has demonstrated some value for supply chains (such as for provenance), but there is also a lot of concepts which have yet to prove themselves.

It was clear that there are individuals galore hoping to make a buck out of riding this wave of expectation. For blockchain entrepreneurs the industry is booming, but as yet many individuals are yet to see the effects it has promised.

One successful example, however, was given by Sian Thomas from the Food Standards Agency, who demonstrated how the FSA deployed blockchain to help track cattle in the supply chain to improve food quality and safety. The right conditions were in place for the trial to be a success — there was already good data infrastructure (based on open standards) and an engaged ecosystem of data contributors and users. Importantly, there was also a real, defined problem to solve — this somewhat contrasts with the current approach of building a solution before finding a problem. Hopefully this will change in the coming years.

The blockchain leap of faith

The interest in blockchain appeared to be higher in smaller, developing countries such as Bermuda (who were sponsoring the event) and Serbia. Smaller populations and less legacy infrastructure can be a benefit for experimenting with blockchain. Bermuda for one is pushing strongly on with blockchain, announcing new blockchain friendly regulations, partnering with Shyft to look at identity and plans to add land registry to it. It will be interesting to see whether the gamble pays off — they even have a blockchain task force! Are these countries gambling on the possibility that blockchain could help them leapfrog other countries?

The quest for Self-Sovereign Identity

There was some belief during the conference that digital identity would be one of the first major uses of the blockchain. Digital identity is going to become an increasingly important area of focus in the coming years. Many individuals, governments and businesses want to be able to verify that they are who they say they are or impose that obligation on others. But any solution (which there will likely have to be) has to, first and foremost, protect privacy and be secure — many proposed and existing solutions will not adequately do so. Particular focus was placed on the prospect of self-sovereign identity, as popularised by Christopher Allen in 2016 as “users be the rulers of their own identity”. People are trying to link identity to the blockchain in the belief that the immutability of blockchain helps individuals reclaim control and build trust. But there may be better and more feasible solutions. There is also scope for blockchain to be used in banking to accelerate the Know Your Customer (KYC) process which according to one panelist account for 20% of running a bank.

The ODI is currently working on a project on digital identity so expect more from us on this issue in the coming months.

Decentralised dreaming

A final comment from David Burt, Premier of Bermuda, is worth considering. He stated that he wanted a blockchain “owned by no one, benefiting everyone.” This is the true decentralised and distributed dream, but in practice it may be hard to achieve. The web promised something similar, but data and power has been since been consolidated by the likes of Google, Amazon, Facebook and Apple. Bitcoin, similarly promised a redistribution of wealth but recent studies have found that “87 percent of all Bitcoins ever mined are owned by just half a percent of Bitcoin wallets.” A lot of work needs to be done for those of us who don’t want to live in a politically autonomous settlement off some paradisiacal coast to reap these utilitarian benefits.

Not a silver bullet

It is clear that blockchain is still in its infancy, there is a huge potential but there is also a risk that these ideas will not come to fruition — it clearly cannot solve every single thing it has promised to.

Importantly, it cannot paper over the cracks of poor data infrastructure or poor decision-making. Marta Piekarska, Director of Ecosystem at Hyperledger, recounted that blockchain was “garbage in, garbage forever”. The immutability of blockchain is lauded, but becomes an issue if poor quality, inaccurate or unethical data is put on there. It is also no substitute for strong policy making, or as an effective antidote to austerity measures.

It appears that the industry is currently being sustained almost exclusively by hyperbole. My personal pessimism may begin to dissipate once more practical solutions have been developed, implemented and brought value to ordinary citizens.

Written by

Researcher at the Open Data Institute in London

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