In 2023 Blockchain And Crypto Will Get (Amicably) Divorced

In 2023 blockchain and crypto will move into separate bedrooms, and will gradually, quietly live separate lives. Blockchain will flourish, becoming a ubiquitous feature across finance, logistics, and shipping. Blockchain startups which serve boring industries like shipping, logistics, and institutional banks will continue to attract customers and capital. But crypto will dominate the headlines with imploding billionaires like Sam Bankman-Fried. Blockchain, conversely, will be like the Tom Hanks of technologies: solid, stable, and always working.?

To understand why blockchain will flourish you need to understand ‘Frank.’

Frank is a ubiquitous presence in every major financial institution.? Frank is a grumpy man with a mustache, who is a few months from retirement. He runs his 40-billion dollar business with a fax machine and a filing cabinet - the exact same way he did during the Reagan/ Thatcher administrations. Frank’s job is to confirm that companies and people have paid one another, and to adjust their bank balances accordingly. Frank has to make sure that the transaction didn’t break any laws.

The problem with Frank is that he’s human and therefore sometimes makes mistakes. One time he placed a decimal in the wrong spot. Another time he wrote an ‘m’ for million where he should have written a ‘b’ for billion. And all the other humans who are part of the ‘Frank Federation’ who triple-check Frank’s work didn’t catch the mistake. Because of Frank every 6 months or so, a banking error makes it into the headlines. Here are a few of them:

UK bank mistakenly pays out $175 million on Christmas Day

Woman arrested after refusing to give back $1.2 million bank accidentally wired to her account

Citi Can't Get Back $500 Million It Accidentally Wired

Frank is the reason the world needs the blockchain. Because the blockchain is less imperfect than Frank. It is a network of people working with technology to check one another’s work and determine who owns what. The blockchain does it faster, with smarter compliance systems, and with fewer errors than Frank does.

In contrast to the media circus about the implosion of FTX, blockchain headlines are boring. For example, I give you this boring blockchain headline from 花旗 Citi Completes First Pilot Transaction on the TradeLens Platform in Asia Pacific. It’s an understated explanation of blockchain doing ‘Frank’s’ job.? Citi worked with a blockchain startup, TradeLens , to process a cross-border payment between multiple shipping companies ten days faster than usual and with no errors. It didn’t divulge how large the transaction was, but it’s not uncommon for these transactions to be more than $10 million.

Essentially, Citi had Frank use the blockchain, and was faster, more accurate, and less expensive.?

I’ve spent too many midnights in huge financial institutions doing work that machines do better than people. It’s mind-numbing, and you live in constant terror of making a billion-dollar mistake. There is a quiet, critical mass of blockchain startups which understand exactly who ‘Frank’ is, and how to do his job in a way which increases sales, and reduces cost and risk.

In the same way that the blockchain is useful, crypto is mostly speculative. Cryptocurrency is more convenient than a suitcase full of cash for economic untouchables (drug dealers, arms dealers, and politically marginalized groups like Afghani feminists). But the astronomical ascent of crypto was fueled by speculation not utility.

In 2023, under the cover of sensational crypto implosion headlines, blockchain will quietly become ubiquitous.?