The difficult promises of Blockchain

Blockchain is promising us a utopian world. A world in which intermediaries are not necessary. A world of maximum efficiency in which value chains are not leaking and all its participants bring that, value. A world in which it is possible to combine privacy and transparency, in which fraud finds greater difficulties. It is a very tempting promise. But it does not promise on the basis of verbiage. It promises it by putting on the table a new model in progress, a currency, which a priori is the last thing we think we can disintermediate.

Despite the tremendous transformational potential of blockchain, it is still possible that all these promises are not fulfilled and blockchain can not take off

With this proposal so attractive and with this demonstration so devastating, it is easy to think of many scenarios where blockchain fits perfectly and, of course, are much simpler than the creation of a new global currency. We are talking about passports, property ownership records, drug traceability or medical records. Anything that can occur to us about identity, property or activity registration and traceability will fit very well on blockchain. Especially if in the current system exists a trusted central authority that it is the one that blockchain will be in charge to replace.

The difficulty arises from the fact that most of these scenarios require the participation of many participants. Participants that, at best, are competitors and in many cases are all the actors in that value chain. For example, a scenario in which you keep track of the entire history of a car. Its owner, the accidents and breakdowns it has had, the parts it has — the original, the repaired and the replaced — … This information would be useful for manufacturers, for insurers, for buying/selling second hand, for the workshops or for the police. But in turn, for the system to be useful, it requires the participation of all those actors.

In all probability, this will mean a slowing down of real -and useful- systems running on blockchain. Despite many predictions these days, I do not believe that 2017 is still the year in which blockchain passes the elbow of its exponential curve. In fact, despite the tremendous transformational potential of blockchain, it is still possible that all these promises are not fulfilled and blockchain can not take off. With this expectation, I do believe that it is time to prototype systems with Blockchain that allow us to understand it better and, especially, to initiate conversations among the possible participants of the system.

All this complexity is eliminated if you start regulating as in the cases of Honduras with its property registration — although it seems it has problems — or Estonia with its notary service within its digital identity program. They are examples where it is likely to accelerate the adoption of systems of greater efficiency and confidence than the current one.

(en español aquí)