No Good Uses for Blockchain …. Really? I Beg to Differ I have been intrigued by a flurry of news stories popping up in the Blockchain space recently, pondering if in fact Blockchain technology is going to revolutionize the exchange of value and data at scale — or not. Articles, like American Banker’s, ‘Don’t believe the hype: There are no good uses for Blockchain ’. The article quotes several use cases, and their progress to date, as evidence to lay its claim. While it may sound logical at first glance, the argument does not hold water when you dig deep and analyze other available evidence presented below:
1. The article seems to conflate blockchain with bitcoin and other cryptocurrency implementations. Many of the limitations quoted by the article including — transaction throughput, energy efficiency, breaking docs into blocks, storing data inefficiently and certain usages of the “smart” contracts, are all misconceptions arising from equating blockchain to bitcoin.
Blockchain technology is not limited to cryptocurrencies and anonymous ledgers. Permissioned blockchain networks built specifically with security and privacy provisions needed for enterprises are already in use solving real-world challenges and supporting complex business processes. These networks can process thousands of transactions per second,efficiently optimizing data footprints for respective business intents. These ‘smart contracts’ are used to automate contractual obligations as well as implement a common business process across all participants of a given business transaction, radically simplifying and rewiring the ecosystem.
2. The right application of blockchain is to enable frictionless trusted transactions for a given business network — not just to power cryptocurrencies like bitcoin. Networks can be public or permissioned — based on the use case. Transactions can take many shapes and forms beyond just cryptocurrency based payments. In the banking industry alone, blockchain is being applied across many areas including customer information, trade and supply chain finance, payments and remittances, treasury and lending, mortgage processes — just to name a few. In the financial markets industry, blockchain is already in use to trade assets, manage asset records, and handle post-trade processing. There are several other well-documented applications in other industries such as Insurance, Retail and Travel and Transportation. All it takes a simple search on the web to learn more about real-world applications in these industries.
3. It is not fair to say blockchain technology has existed for 10+ years. Enterprise ready, production grade blockchain technologies have emerged only in last 6–12 months: Quorum v1.0 on Nov 21, 2016 , Hyperledger v1.0 on July 12, 2017 , R3/Corda v1.0 on Nov 20, 2017 . The fact that we already have enterprise business networks in production is a testimony to the efficacy of this technology to solve business challenges over other technology options.
Why should blockchain’s success be defined by whether or not it replaces a Mastercard or Visa network? Should it not be considered a success if it solves a business challenge more effectively than other competing technology?
Who said blockchain is only applied to circumvent regulations and prudent business practices? Let’s separate technology capabilities from ideological debates on how it is being applied in a few offbeat use cases. Its’ time we cut the noise out and focus on pragmatic applications of blockchain to solve real-world problems.
