Blockchain’s People Problem
When Human Capital Fails
Blue-blooded consulting firm McKinsey & Co. rarely gets it wrong. The firm hires some of the smartest people in the world to figure out what are insanely complex, detail-oriented, multi-case-specific revenue, customer adoption and cost problems every year. So it’s great to see that consultants Matt Higginson, Marie-Claude Nadeau and Kalsik Rajgopal who are from the firm’s top three U.S. offices are once again, keeping with the firm’s tradition in hitting the target of a problem like the golden bullet in the crosshairs of a laser-guided missile:
There is a clear sense that blockchain is a potential game-changer. However, there are also emerging doubts. A particular concern, given the amount of money and time spent, is that little of substance has been achieved. Of the many use cases, a large number are still at the idea stage, while others are in development but with no output. The bottom line is that despite billions of dollars of investment, and nearly as many headlines, evidence for a practical scalable use for blockchain is thin on the ground.
McKinsey’s latest Blockchain report reveals the abject state of innovation failure in Blockchain right now more brutally and more honestly than pretty much anyone else who’s deigned to analyse the technology so far.
Part of the reason is that the technology itself is pretty crap. It’s a very standardised software, much like an excel spreadsheet, with a very unique and exceptional use-case: that crap smells like money. If it wasn’t for the ascription of financial value to the data storage process that is entailed in the digital ledger’s processing functionality, Blockchain would be a thing of the past already, ascribed to weird library-storage use-cases that you never hear about.
McKinsey’s report suggests that in 2017 over $1 billion was invested in Blockchain start-ups by venture capital firms. Even this figure is likely fictional however, since most Blockchain companies by virtue of self-currency issuance manufacture the bulk of their capital raise numbers for the purpose of looking bigger and more likely a potential threat to established industry than they actually are.
The fact is, Blockchain contains some of the poorest innovators with some of the weakest profiles that we have seen in a long time for what is described as both radical and disruptive in technology terms. Take the three market incumbents: Ethereum, EOS and Tron. One is built by a 20-something who, while smart, has been unable to deliver anything else subsequently (calling into question how much of his presence at Ethereum is pure marketing spin), another is headed up by Brock Pierce, a former child-star from Hollywood with a highly questionable reputation, and the last one is founded by a mainland Chinese plagiarist who apparently, upon being frankly confronted with the evidence that his White Paper’s contents were stolen from Filecoin’s White Paper, reacted by saying “we have come to consensus that this did not happen. And we have moved on.”
Maturity, credibility and honesty are missing from each of Blockchain’s market incumbent projects, in other words. It therefore makes logical sense that it would be very hard to mature any sort of viable financial market economy, spearhead credible mass-adoption or to appeal to transparent market players which is where all the massive money resides always.
It’s frequently that you hear people who are working with or investing in Blockchain saying things like, the whole system is corrupted; it’s all rigged against the common man. Here is a wake-up call for you: it’s not. It’s rigged against you, because you are a social outcast who refuses to accept that it takes hard work, endurance and ability to amass what is in reality an unfair share of rewards.
Until Venture Capitalists stop openly supporting the sort of pond scum that resides at the top of the Blockchain river, you can expect more mosquito-infected swamps and little-to-no resolution of what McKinsey calls “Blockchain’s Ocean Problem” (a reference to the somewhat overrated 2006 strategy book Blue Ocean Strategy wherein the authors detail how firms roll out products into uncontested mass markets).
Russian criminals, American down-and-out rent-me-a-career attorneys, strip-club owners, child-beaters and liars are not the sorts of people who built the economy that produced Boeing 747s. That was something rather different, and until Blockchain finds the same sorts of people who did that, it’ll remain nothing more than a second-rate form of money that is consigned to third-rate financial use cases.
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