Blockchain has an image problem. Last August, Gartner declared that blockchain officially entered the depressing trough of disillusionment.
We’ve all witnessed the signs. The crypto winter. The death of the ICO. The souring of the media headlines.
We’ve entered the quiet time where the real innovators put their heads down and work until they are able to show something real to the market.
In this article, I’ll walk you through the status of the barriers, the progress, and how to think about a more connected world will operate supported by blockchain technologies.
Blockchain’s barriers to entry
Last month, Provide, Emory University and Aprio, concluded the State of Enterprise Blockchain Study. The survey measured the progress into blockchain of 82 companies ranging from startups to the Fortune 50.
63% of the companies surveyed reported that internal skills and tooling maturity were the primary blockers from investing further in blockchain. This makes sense. Blockchain is complex stuff. Anything built on cryptography must have a steep learning curve for the masses, and businesses are busy running their businesses. So if they do it, they need a quick path to be productive.
The good news is tooling has matured. Unless you are building the chains and consensus algorithms themselves, using Distributed Ledger Technology is well within reach of any developer.
Projects like Truffle give developers a full, modern IDE that makes developing smart contracts on par with developing other languages. It feels familiar and has lots of features and examples to help developers learn and be productive.
Ganache gives you the ability to test locally — deploying local chains, before you commit bad code and pollute your public chains.
And Provide helps you make repeatable deployments in seconds and Twilio-like REST APIs that make it easy to integrate with your applications — in their native languages.
So, your enterprise technologists could — using their existing programming skills — begin interacting with DLT using your existing tech stack.
Blockchain isn’t so far out of reach.
This shouldn’t be a surprise. The path out of the trough of disillusionment is paved with improved infrastructure and tooling.
75% believe blockchain will be as ubiquitous as cloud by 2025
The path doesn’t appear to be long either. Most of the study respondents — 75% of them — said blockchain would be ubiquitous as cloud by 2025. That’s 6 years away.
So, how do we get to ubiquity?
This feels harder right now. Hype causes people to be cautious. Headlines of forking, fraud, and frustration spur fear, uncertainty, and doubt. Lack of real tangible examples diminish confidence.
But adoption is happening out there—and in a big way. Companies are wise to the practice of being out-innovated, and are quietly investing investing now.
In April of 2018, Statista published a blockchain adoption study that surveyed over 1000 companies. They found a huge number of organizations are already actively working with blockchain. Some are even in production.
Some of these are in the headlines. On January 31 of this year, Walmart rolled out their Food Trust initiative that aims to help them reduce the time to track the source of bad produce from 7 days to 2.2 seconds.
This is not only good for Walmart, but also its suppliers. The romaine lettuce outbreak of e. coli last year forced Walmart—and all the restaurants they supply—to destroy the inventory just to be safe. Then lettuce prices plunged 45%. The outbreak affected Walmart’s entire supply chain.
In the financial services arena, JP Morgan may be cautioning their clients against crypto, but they are simultaneously one of the largest corporate leaders in this space. Their Quorum initiative, formally named Interbank Information Network (IIN), is eliminating time and cost out of cross border payments. This initiative forked ethereum and built it to work as a consortium that specifically works for banks. They have 175 banks on their network today.
The insurance industry is doing the same thing with Corda. They have over 200 companies participating.
Governments are turning to blockchain en masse. Venezuela is using it to revive their economy. Estonia has put their whole government services sensitive data under the protection of blockchain. They UK is working of food safety and land registry. The US is working on projects with the FDA and Homeland Security protecting our borders. Dubai wants to be first to have it all—from visas, to citizens to land registries—every government service is to be protected by blockchain.
There is a lot happening, but it is not very obvious unless you really look. Even then, it can be difficult. Systems are designed for utility, not to advertise the technologies that power them—and companies rarely share the details of their IT projects. For instance, what data store is Medium using for this article? I don’t know—I just care that it works. The same should be true for blockchain.
So where should you start looking?
First, I’d suggest you look at the big picture. Doing blockchain for the sake of blockchain does not make business sense. We learned this with open source—just because you build it, doesn’t mean they will come. You have to provide value. There are no shortcuts to this.
Look at your market and identify anything that fails to spark joy. Look at how the market could perform better by being more connected. Insist on building exceptional experiences. Blockchain’s progress suffered from poor and complex user experiences to date. It is time to usher in the era of UX for blockchain.
For example, if you are building a ridesharing app on blockchain, it needs to have a modern feel like Uber—and pay the drivers more, while the customers pay less.
You have to reimagine experiences. You need to look for opportunities to change market dynamics. Look into your crystal ball and re-envision the future of how we should be looking at data and privacy.
If you don’t, as with every tech turn — you could pay the high price of bankruptcy.
To illustrate, I’m going to walk you through an example that is familiar to you, and discuss of what could happen next.
How eCommerce changed the video industry
Picture Blockbuster circa 2000—right when the dotcom bubble was at its peak. You’re on top of the video rental marketplace. Your biggest competitor Netflix just asked you to buy them for $50M.
You say no… let them die. You’re the king.
You keep doing what you’re doing, and you do it pretty well.
Netflix on the other hand, had to reinvent. They raised some money, and looked at their opportunities. Things rolled along, until something interesting happened in 2007. Netflix announced it’s pivoting its business to the internet.
This seemed crazy at the time. The internet was still a pretty rough place. Streaming media was expensive and low quality. Not a ton of people had good bandwidth at home. The first smartphone was just coming out, and smart TVs were years away. They really didn’t have a market—but they did see one developing.
You see, Netflix noticed that online commerce was surpassing department store sales. eCommerce had been vilified in the dotcom bust, but it was sure making progress now. They saw the sands shifting and they went all in on a new marketplace — the internet. It took a lot of engineering. It took time. But they invested in building a business that worked in a new market.
By 2010— just three years later—Blockbuster filed for bankruptcy. They were too behind to keep up with the digital age. The damage was done.
From my view, a similar shift of a larger scale is happening now.
How Netflix could get eaten by blockchain
Peer-to-peer markets are coming for Netflix.
Now, instead of licensing our content to Netflix, we can leverage the internet to do real digital rights management and share content directly. Artists and studios can earn more for their efforts, while their audiences pay less. Now, instead of paying services to show you commercials alongside the content, advertisers can pay you to watch their ads.
This is happening today. You can go and download the new Brave browser and earn BATs — Basic Attention Tokens, that can be used to purchase content and services. The Brave browser will save your battery and patience from malvertisements and trackers, and provide higher fidelity of real interest for advertisers. All while operating in a more secure browser. Brave and BATs are the brainchildren of the people who brought us Mozilla and Firefox. They saw an opportunity to fix the problems of the relationship between today’s browsers, users, and advertisers by creating a new open market.
A new full service movie studio in Georgia, called Gramarye Media, is creating new economy to grow entertainment franchises more reliably. They’ll use a variety of multimedia and feedback economies to develop audiences. Audiences receive rewards for their participation and Gramarye uses their signals to build some of the next biggest movie franchises.
These are people that have already brought us Terminator, Band of Brothers, the Truman Show and Duck Dynasty, among others. These professionals already know how to develop these stories, and they’ve figured out a way to do it better, with less risk and better incentives for artists and communities to come together. They saw a way to make movie making more profitable by rewriting the market.
These are experts that see problems that plague their industry, and choose to think differently about it. They’re thinking bigger.
To understand blockchain, think differently
In order to grow, you must change. You have to throw out what you know, and figure it all out again.
We did this with compute power. In the 90s, we were convinced the only way to get more compute power was to get bigger computers. Then Moore’s Law started to run out, and we had to change. We now know that lots of average computers scale far more effectively than one really big one—and cost less. We had to think differently to scale radically better.
Nothing is true, everything is permitted. —Hassan i Sabbah
Blockchain requires this open mindset to see it’s potential. It lets us fundamentally operate differently on a global scale. It will help us usher in a true global economy, that will include and serve far more people than business serves today.
Blockchain takes data out of the control of a single company and puts it on the internet. It puts a layer of data into the internet—a fat internet, if you will. This decentralized world operates very differently, where open communities provide governance and protections for the data, and create magnificent efficiencies.
Data lakes become data oceans
Data lakes are the envy of every CIO. But they only made sense for large companies, with large amounts of data and money to support them. Data lakes take an enormous amount of work to collect, curate, and protect.
Think about a world where companies don’t have to put in that effort to reap the benefits. They simply attach to a market.
For example, 45% of Americans are organ donors. These are people who opt to give their hearts, lungs and kidneys to strangers so they may live. Wouldn’t it make sense that these people would donate their medical history to a data ocean that researchers could openly harvest if they knew their privacy and anonymity was guaranteed?
We can do that with blockchain. The implications are profound. People would be more likely to donate their information to a trust for the greater good. It could lower the costs of development of new therapies, and reduce the barriers to innovation for important researchers that lack adequate financial backing.
Privacy laws become real data privacy
GDPR and CCPA are huge laws that are impacting business today. They reflect the sentiment that users are really, really concerned about their privacy. Users want the right to be forgotten. They are furious that companies they trusted to protect their data sometimes fail.
Millions of companies are working to make sure their systems are compliant with these new laws. Billions of dollars are sure to be fined when they aren’t successful.
According to the Poneman Institute’s Global Cost of Data Breach Report, the average cost of a data breach was $3.86M and takes an average of 197 days to even detect. These are really expensive challenges for businesses. These are front page issues for the annual report.
Again, this is an opportunity to think differently. What if we worked together to define new standards where users own their data and permission companies to use it? What if there was no central place to attack and steal the data?
How much can you save on risk? How much can you save on security? How many more customers will choose to operate with you knowing their data is secure? This would not only satisfy the letter of the law, but the spirit of the law.
Decentralization for the greater good
Centralization keeps your world far too small. Decentralization means you can truly operate at a global scale. When looking at the opportunities to use blockchain, think bigger. Think how decentralization can open new markets. Don’t be afraid of the change, be a part of it. Figure out how you can lead and provide value in a truly global market—or risk being “block”bustered.