Blockchain Folly?

As with any new technology, blockchains have both pundits and doomsayers.  In the end it really doesn’t matter what people think.  The success or failure of blockchains will play out over time.

Recently, I read a quote from a blockchain skeptic.  I was doing the daily sweep of crypto-news.  Ether was down 15% for the day.  Profit takers, no doubt.

To be fair, the blockchain skeptic acknowledged that the technology was “fascinating and powerful” but he went on to say that blockchains are basically shared databases that are “… incapable of making mass consumer bank interactions any cheaper, more accessible, or safer.”

Here is the other side of that argument:

• Since there is no proprietary ownership of the blockchain structure, there is no single point of manipulation or failure. That makes them safer.
• Value can be sent to a retailer, or another person, for almost nothing. Cheaper.
• Blockchain transactions are immutable (at least transactions on large public blockchains are). Payments cannot be reversed accept by agreement of all parties.  This saves both retailers and money transfer agents time spent managing payment reversals.  Cheaper.
• Smart-contracts – essentially automated logic sitting on a blockchain – can decrease the oversight needed to adjust balances in escrow accounts without the need for a central clearing function or human intervention. See demo.  Cheaper.
• Blockchains can decrease the cost of multi-sig controlled payments.  Cheaper.
• Blockchains can automate triple-entry accounting. It is possible to make adjustments to a buyer-viewed ledger, a seller-viewed ledger and a blockchain ledger -- all synchronized.  Cooler and cheaper.
• Blockchains will likely decrease the cost of validation, verification and AML/KYC compliance.  Cheaper.

Blockchains are the province of the maximalists and wannabe tech-savvy folks, alike.  But there is little doubt that the blockchain trend is gaining momentum.  Here is my interpretation of the opinion spectrum:

THE BLOCKCHAIN OPINION SPECTRUM

Looking ahead, The Internet of Things will throw the door wide open.  Eventually, a washing machines will be able to buy detergent from Amazon – all by itself.  See use case.   As part of this paradigm shift, customers will demand an easy way to fund their appliances (Don’t expect a call from your frig asking for money.)  All this is fertile ground for thought leadership.

Count myself a believer.