Decongesting Crypto
As 2018 winds down, we are left to reflect on the highs and lows of a polarizing industry known as blockchain. One statistic that stands out is that 92% of all blockchain projects have already failed. Upon taking a closer look at this statistic, only 8% of 80,000 projects that claim to utilize blockchain technology still exist today. Experts and enthusiasts alike attribute these failures to companies creating a supply before demand, relying on the concept of blockchain technology alone to catapult their businesses. Although Western culture has pioneered the implementation of a decentralized system, there is more of a demand in developing countries who could benefit from early stage blockchain protocols.
In the Western climate, we have reached a point of stagnation as projects are adopting the concepts of other ventures in the same space, without witnessing sensible longevity of said concept. Although bitcoin paved the way for a decentralized ecosystem, it should not be considered synonymous with blockchain initiatives. We are now seeing a type of crypto congestion, where companies are creating and issuing tokens for theoretical projects, with the same expectation of disrupting the industry. The question now stands on how these roadblocks can be overcome to not only shift expectations but authentically achieve mainstream adoption of blockchain-based platforms.
Because major enterprises like IBM, Walmart, and Microsoft have already taken strides in integrating blockchain technology into their current systems, we are able to witness the beginnings of mainstream adoption in developed countries. IBM launched its blockchain-based food traceability platform, where wholesalers, suppliers, and retailers can track products across the food ecosystem. Walmart is taking a similar approach while Microsoft spearheads the integration of cloud data storage with blockchain. These examples provide the practical use cases for blockchain, in the form of a centralized system using the technology as an enhancement rather than an individualized structure seeking to create value at a rapid pace.
The key to individualized structures expediting their success would be the implementation of their technology into emerging systems of government. David Crosbie, a lecturer at the University of Pennsylvania, writes that blockchain has the capacity to replace the systems of “trust” people currently rely upon when it comes to governance. Clearly, those systems can be corrupt in nature, which Crosbie underlined in his statement, “The problem is we have handed governments the ability to lock us up, take away our belongings and even kill us, in exchange for a reliable and predictable legal structure.” Given these dysfunctions are often more pronounced in the developing world, Crosbie makes a viable prediction that blockchain technology could have the greatest impact in said regions. Ideally, the technology would create a new foundation built on transparency while granting power to people in underdeveloped countries. Consequently, Western use cases for blockchain initiatives in the genesis phase are less compelling as our banking and judicial systems are established pragmatically.
Nonetheless, it is apparent that we are on the horizon of a global transformation, despite, or because of, continued trials and errors. What if the 92% of blockchain projects that failed initially offered their technology to underdeveloped countries? Perhaps blockchain-based projects are not so much creating supply without demand, but unfinished solutions that, with a little tinkering in the new year, can transform society for the better.
