Counter-alchemists: please stop transforming blockchain fever into IT boredom

Laurent Benichou
Nov 1, 2016 · 11 min read

Once upon a time, blockchain was disruptive. And unconventional. And good. And full of promises.

There was a time Bitcoin was a positive delirium, a passion, an ambition much broader than a new form of money. It was an attempt to disrupt the way things are done and invent a new world. Read Satoshi’s white paper and you’ll understand the ambition. Read Mastering Bitcoin and you’ll understand Bitcoin technically with Andreas Antonopoulos: you’ll understand the value of Proof of work, the OP_RETURN usefulness, the value of Pay-to-Script hash, some BIPs… Whether they created it, contributed to it or explained it, hundreds of people have made bitcoin, a new type of money that is now much stronger than some fiat currencies. Those people are like alchemists to me. I found a quote from Gaston Bachelard about alchemists on Wikipedia:

“Alchemy is only a science of men, single, men without women, of initiated people removed from the human communion”.

I guess some bitcoin and ethereum geniuses match this profile. Maybe myself included, my wife would add.

Then we talked about blockchain. But not because we were ashamed of bitcoin. But because some people wanted to leverage bitcoin to do more, and rebuild the world virtually from scratch. Listen to Susanne Tarkowski Templehof, think about how bitnation could replace our bureaucratic lame administrations. You’ll be willing to eat the world. And you’ll love Susanne. That’s in the case you are like me. Full of anger about the current problems consumers and citizens face. Fully in need for a better world where individuals take action. Fully in need of a world where the provider that treats you without respect is destroyed by annoyed people. Even if the provider happens to be a State. In a tripadvisor-type of mass revenge.

Blockchain hits will come from new initiatives from the chaos

That was 2 years ago. That was great.

Today, the blockchain promise is threatened by massively-reasonable counter-alchemists

Now that blockchain is hype, a new bunch of people (of too normal people from the former world) are getting excited about blockchain. And the trouble is they have become “global heads of blockchain” or whatever other pretentious title in their respective big companies. And they talk. A lot. About blockchain in their own sector. And they have great résumés. And they come from big universities. And they did not know anything about cryptography before 2013. And they say a lot of nonsense about blockchain. And they slowly transform a potential disruptive technology into an IT boredom. I call them Blockchain counter-alchemists: people that possess the rare skills to take a nugget of gold and transform it into a piece of lead, people who turn your great diamond into a handful of plain carbon. As global head of blockchain at AXA, I humbly think I could be one of them. I don’t code. I don’t master proof-of-work. At all. I come from a good business school. All of that could lead me to only engage in projects that are not disruptive at all for insurance, where I just USE blockchain to make better old-fashioned insurance, and I transform this potential disruption into an enhanced IT platform for better insurance cross-company information transfer. I could be this kind of “blockchain impostors”. I think I am not.

Because I think I know a few things about innovation. Because I prefer to think about blockchain in terms of innovation, not in terms of IT. And because I read Clayton Christensen.

Sadly, Clayton hasn’t been read by blockchain counter-alchemists. Because blockchain has come from 100% disruptive to 80% incremental over the last few months. And I think it’s a tragedy for all of us. Let’s describe those counter-alchemists, so that you can catch those bad pokemons next time you happen to meet them.

1. Firstly, some Blockchain counter-alchemists have problems with words. They don’t say bitcoin any more. One year ago, they said Blockchain instead. And if you were positive enough, you could have accepted that for the simple fact that there are other blockchains than the bitcoin one. But it was just because those people just find bitcoin too close to drugs and hacking. Now counter-alchemists don’t say blockchain either. They call bitcoin « distributed ledger technology ». Cleaner. Less underground. Reader, please be kind to me: next time you see some guy telling you he doesn’t do bitcoin but he is very interested in working on distributed ledger technology, please open you pokemon app and send them a lot of pokeballs to stop them. Read what happened to @Coinjournal recently: https://cointelegraph.com/news/coinjournal-stops-covering-blockchain-after-barclays-shuts-down-its-bank-account. Now there is a second category of counter-alchemists that are more difficult to identify: those who have made part of their homework on proof-of-work and bitcoin but that provide definitive assertions on close topics they don’t master. They are dangerous because identified as being experts by others. Pokeballs for them too. And for anyone that does not seem humble enough when talking about the topic.

Pokeball on blockchain impostors. Capture them all!

2. Blockchain counter-alchemists focus on incremental technology. They love it. Keeping ambition very low is their main concern. And keeping projects very technical too. No vision, that’s what they want. They could have seen that bitcoin is a new currency with no bank and that one day people will do the same with stocks or bonds. They could have invented a new P2P way of exchanging stocks. But no. This is not what counter-alchemists do. Instead, counter-alchemists team up together to improve their current inter-banking stock-exchanging private system so that it’s less costly. And it will be less costly that the 19th-century processes they have today. Don’t get me wrong, it might be a use case that will deliver value. It’s just not the disruptive use case Clayton Christensen would like us to invent. It’s an IT project. Plain and simple.

3. Blockchain counter-alchemists are great thinkers. They discuss a lot about the philosophical meaning of blockchain. But they don’t act a lot. And they ask themselves a lot of questions in order not to proceed : what will regulators say about this disruptive idea I just had? aren’t we cannibalizing our own business? Is it what our biggest consumers ask us to do? Am I sure this blockchain thing is stable? Mmm, let’s do a few more PowerPoints before we code anything. Sometimes, they want to do things in the end but their boss may not agree. Paper shuffling, paper shuffling. No action. Like people from Teldar Paper, if you remember the movie Wall Street.

4. Blockchain counter-alchemists shy away from public blockchains. Because you know, it’s public. Therefore bad. Unknown. Oooh, freaky. Their conversations with me:
- Counter-alchemist: We’d rather have a private system. Blockchain-based because it’s the future. But private.
- Me: OK, but don’t you think you take out all the magic if it’s private? You know, you’re just doing a private shared database then
- Counter-alchemist: Yeah well, that’s why we use this chart. And you answer all the questions. And depending if it’s yes or no on multiple questions, the chart tells you whether you’d rather make a standard shared database or leverage blockchain publicly or privately
- Me: Ah OK. So what are your current public blockchain projects?
- Counter-alchemist: Er… we have none so far… because you don’t want to mess up with your data, you know. So we focus on private blockchains for now

IT giant quote on blockchain: “Blockchain (…) will be private (…) permissioned”. Not necessarily, punk! And I might add: not at all, unless you want to make a very boring project

5. Blockchain counter-alchemists don’t use blockchain specialists. Because it’s too cheap. And you know, they wear T-shirts. And they are coders, so we don’t want to waste time with them, they just did bitcoin and other cryptocurrencies, but what else? But on blockchain, we’d rather have big IT companies. And big companies understand that a good blockchain should be a private one by the way. And they can work with us and charge us for additional products that they will add to their blockchain offer. It will be a blockchain different than bitcoin, much more expensive and with included features that those IP carpet bombers will charge in a “as a service” mode. But at least, it will be greenlighted by my IT security team so that’s cool. Whereas writing directly on the bitcoin blockchain… well… IT security will never let us do that.

6. Blockchain counter-alchemists are concerned by China’s involvement in Bitcoin mining. To be honest, I call that racism but they call that a concern. Because you know, isn’t it wrong to use a system that is 70%-mined by the Chinese? Well, I don’t know, 70% of your clothes come from China: are you afraid to wear Chinese cotton?

7. Blockchain counter-alchemists love consortiums. You know, because we seat there together and it’s better to make a standard instead of having multiple projects compete against each other. Well, maybe. But I, Laurent, have a few problems with consortiums.
a. Decisions and projects are SLOW. There are steering committees and votes and discussions and contract drafting and lawyers and conference calls and coffee breaks and everything
b. Schemes and ability to decide on new projects are not clear. If I were a bit provocative, I’d say that big companies invest hundreds of thousands of dollars in consortiums that startups steer in reality. Unfair.
c. There are IP discussions for each project, making it unclear until we launch if one project will be IP-free, open to consortium participants exclusively or invoiced by the consortium.

8. Blockchain counter-alchemists have little to no interest on blockchain security. And they treat blockchain as a whole. No difference between proof-of-work, proof-of-stake, Paxos and other consensus protocols. No view on what blockchain should or should not be when it comes to cryptographic security. Sometimes no humility about their knowledge. Whereas I believe Socrates should guide us on blockchain:

The Only true wisdom is in knowing you know nothing.

And work like hell to fill the gap, I would add.

Let’s get rid of blockchain counter-alchemists!

I have a view that is very different from blockchain counter-alchemists. I am not an incremental person, I am much crazier. I prefer havoc than stability. I see the good that storms can bring. I prefer to sit down with cypherpunks than global heads of whatever big company. And I am responsible for Innovation, not incremental IT in my company.

Hence my blockchain proposals for the “blockchain community”:

1. Ask everybody involved with Blockchain to read or re-read The Innovator’s Dilemma, by Clayton Christensen. Old but simple and easy-to-read book. The kind of book that can help us think what are good use cases to leverage blockchain in the long-term. If you are too lazy to read the book, just watch this video:

2. Keep innovation teams on disruptive innovation projects and leave incremental innovation to your other teams (IT, marketing or other teams). “Winter is coming”, as they say in Game of Thrones. In many sectors. Therefore innovation teams really need to get the company ready for the next big shift. Think about what you would/should have done when the Internet was created: present your catalogue online? Well, better than nothing. Sell online? not bad. Leverage the concept of long tail through a merchant marketplace or an “Amazon suggests” feature? Better. Invent dedicated tools for this medium specifically, like Google or Criteo? Much better. We should do the same with Blockchain, and even more if we work with financial incumbents that have everything to lose if blockchain disruptors bring really new ideas to the market while we are in the 37th steerco of our mammoth blockchain consortiums. I think we’d rather all imagine what would kill our own company and hurry up do it before competitors eat us. If I were a State lottery, for example, I’d worry that a startup use the bitcoin nonce as the next unpredictable random draw. Killing powerball and euromillions is something any startup could do tomorrow. Winter lotteries are coming.

Winter is coming. Will big companies use blockchain to patch the old world or face winter threats?

3. Promote the no-IP principle for blockchain access. Blockchain can change the world and bring administration, banking and other services to the poorest. But that will be the case only if blockchain access remains cheap. That will be the case with blockchain startups. Or it could be the case with IT biggest providers if they accept to charge us a faire price for blockchain access and don’t add up new services on top of blockchain access. The no-IP concept is something we largely promote in the French LaBChain consortium but it’s hard and questioned by big IT players interested to join us. My latest discussion with an IT player that wanted to enter our consortium was a bit confusing to me: they said we can use the hyperledger source code that is “open-source” but if we want to change it, they will have to charge fees to us. Seems like “closed-source” to me. And almost telling me that smaller companies of experts (paymium, blockchainiz, blockchain solutions…) are better partners for blockchain enthusiasts. First because they are better at blockchain, second because they don’t have time to hire lawyers that will transform a principle of open source into a licensed service in article 63.B.2. iii) of the terms of use, third because they won’t try and include non-blockchain services that we don’t need in the service.

4. Never enter a consortium if you don’t understand clear and simple advantage for your company: how many people of my company will be trained on blockchain? By whom? Will we be allowed to work shoulder to shoulder or am I just giving money to this startup that won’t transfer any knowledge to my teams? How will the consortium decide on new topic identification / is there a risk that my voice does not count in the consortium? On consortiums, do also think about who in your company will need to join: innovation team because the project is quite new and analigned with current strategy? IT because it will allow your developers to ramp up on blockchain? Project developers because the consortium has blockchain experts and your main interest is implementation?…

5. Start small and ramp up: as with every technology, I have been struggling to understand bitcoin, ethereum and I am now looking at multiple crypto currencies. Instead of aiming for big bang projects, my goal is to start with a small project (but actually delivered to customers) so that early adopters help us improve over time. It’s also a good way to avoid exposing your company to too much hacking on day one and also ramp up over time on this matter.

6. Don’t go too far away from the heart of blockchain in your first project. If you look at the most capitalized startups, apart from ICOs, you’ll see companies linked to hardware and the concept of mining (e.g. 21), bitcoin architecture and software (e.g. Blockstream) or with payment (e.g circle). Very close to the heart of bitcoin. In the field of smart contracts, I believe that simple contracts using the P2SH bitcoin feature can be deployed today. I like this article that shows some people have understood that bitcoin adoption might be the first real thing to do, and that try and include unbanked people in this disruptive technology: https://bitcoinmagazine.com/articles/cyberfunks-alliance-for-the-unbanked-uses-play-to-promote-bitcoin-adoption-1477339253. Not far at all from bitcoin, you may say. But who has done it so far? Maybe a task financial incumbents should promote. Unless their counter-alchemists fear “it might cannibalize us”.

So much for me today, I need to buy some Zcash now. Talk to you soon.

How to detect a blockchain counter-alchemist with z-cash? A race of counter-alchemists will tell you they don’t know or don’t see the point of zero-knowledge proof, another race will tell you it’s just for hackers and drug-smugglers.

Laurent Benichou

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Bitcoin Blockchain cryptocurrencies. Humor, entrepreneurship, standup comedy & innovation.