About adoption of blockchain

Why is #blockchain #adoption for industry or enterprises such a challenge?

My 2 #bitcoin (if only) - after 10 years.

Really looking forward to hear your thoughts, comments, insights as this is a very personal opinion shaped during the past decade of #DLT.

?? The essence: I think that the needs of the industry are from a totally different universe than the mindset of the developers. A bit like developers are from Alpha Centauri, industry is from Star Wars.

A developers point of view

Here goes (and I'm careful to not generalize). Most #developers do not see blockchain as just a technology. They do so with SQL Server, Kubernetes, AWS, Rust, ... <add virtually any non blockchain related item here>. Why oh why?

I think it's because the first blockchain technologies revived the spirit of the World Wild Web. The anarchy! Everything is possible! The techno-positivism! Power to the people and democratization of formerly state owned power! Disrupt everything! Decentralize!

Furthermore, quite a few developers got involved in those blockchain technologies along the way. They own bags with magical internet beans branded ETH (or ETC), BTC, ADA, SOL,... etc. There's skin in the game, a potential personal gain based usually on the capability to understand the mechanisms and the technology.

An industry point of view

At the same time, #industry is looking into return on investment, #sustainability, process #efficiency. The economy is under pressure, due to warfare, climate change, demographics, politics. Economic theories from Friedman & Keynes still urge companies to pillage their competition, not to collaborate on joint solutions for common problems.

When enterprises take the leap, they have regulations to respect. Privacy, DORA, data sovereignty,... Standardization and agreements are a key to success. This means non-developers are essential to enable and allow solutions to serve the industry.

Trust is already present, to some sometimes minimal extent, in enterprise relations. These are legal persons making and executing agreements, sometimes enforcing them or even going to court. Cementing trust in these existing collaborations, and leveraging the relations and knowledge that exists to increase efficiency and effectiveness is paramount, and of strategic importance.

The challenge

?? Try to find matches between "developers" and "industry". It's really totally different. This results in

1?? (overengineered) theoretical decentralized blockchain based concepts, with no industry adoption as the value remains vague, unclear, non-existing.

2?? asks from the industry to have solutions with #web2 identity, easy UX/UI, in a closed #ecosystem, where developers doubt if a central database wouldn't be easier thus have no interest in making it work.

I'm aware of a whole industry building blockchain based solutions with an enterprise focus, to offer services to the industry in a SaaS model. I'm aware of DeFi, dApps to bring technology to the market. The story above is mayhaps a bit black and white, which is not (entirely) the point.

The crux - communication

So what's the crux of these observations? The CHAISE_EU project highlighted, somewhat to my surprise, that the most required blockchain skills are focused on

1. communication
2. collaboration
3. use case development

It seems to make sense, doesn't it? People are not little dogs, you can't rub their nose in silly things they do. Furthermore, we need sound developers, and strong business people to thrive. But, and imho especially for blockchain, it is really required to have "people in the middle" involved. Blockchain is where technology and strategy meet.

One can go without the other. No question about that... collaborations exist for way longer than blockchain technologies. It's more of a 1+1=3 situation: when blockchain is used to drive collaboration, or when a collaboration relies on blockchain to function, magic happens.

You can't leave anything blockchain related only in the hands of developers, like you can with practically every other technology. At the same time, you can't ask business to just define the needs and user stories, as blockchain is a strategy and (re)defines the needs.

The crux - decentralization

<edit> I added this part later as I realized I should have been more explicit </edit>

From a linguistic point of view, something is decentralized as soon as it isn't centralized. It's a binary thing: you're either centralized, or decentralized.

In a blockchain perspective, (de)centralization happens on governance, architecture and execution level. In every possible combination. Gary Gensler (former SEC chairman) frequently hammers on the "not that decentralized" nail. He's right, on some levels. Which is important to understand... BTC price is mainly created on exchanges (read: Binance), a few core developers safeguard the code, I'm running three nodes, used to have miners and hundred thousands unnamed people do the same. At the same time, some 2000 wallets hold more than 1000 BTC. Decentralization is complex, if not properly understood and contextualized.

When is it enough? How far should decentralization go? There's no clear answer apart from "more". There is no clear value, no ROI, it's supposed to be "more secure". Than what? And then what? Even more? This is a pointless discussion, especially from industry perspective. It has to be decentralized, to evidence that data can be kept immutable (backed by legal contracts) and shared across the closed loop ecosystem.

As soon as decentralization is sufficient to serve the use case, it's actually enough. Anything more is nice to have, not need to have and certainly not "a must have or it's not blockchain".

Too often when talking about blockchain in a technical context, endless never-ending decentralization is the ultimate goal. It shouldn't be the case. It's a topic that is usually completely pointless for industrial players, acting with known parties in long term mercantile agreements. As it touches the core values of many blockchain"-believers" (it's a technology, not a religion), it's a tough nut to crack when looking into the business value of use cases.

Decentralization should be a consequence of the success of a project: with more industry partners comes more decentralization.

At the same time, projects are developed and put in production, so it's not impossible to overcome these differences and be successful. It won't make everyone happy, but we're not selling ice-cream.

The evidence

?? Where is this (meanwhile long) post based on? I'll give a few examples, some of which date from pre-corona. In the end, every piece of evidence is anecdotical.

- During one of the #EUBOF sessions, a use case between member states was presented (focus on customs) with clear benefits for parties involved (30-40% of process efficiency). First remark from the audience: this is hosted by member states, thus not decentralized, so it shouldn't be a blockchain. Immediate response from the presenter (a EU head of unit): who wants to pay for decentralization?

- During an event, I was talking with a person who was hired by a Layer 1 blockchain technology "company" with amazing (PhD) engineers. The task of this person: find use cases, explain it to the engineers. After a few years and disillusioned, the person quit. Impossible to make the engineers consider even the easiest use case as not only the ledger had to be public, but also the identity, the onboarding, etc. Tech first, industry value much later.

- A frequent point of discussion are public permissionless versus private permissioned ledgers. Yes, there's a shift to hybrid solutions, or public permissioned ledgers (because identity is key). I asked a person to explain me the value of decentralization. Answer: it allows parties who don't know or trust each other to execute transactions. My response: do you think this is how industry works? My conversation partner was flabbergasted.