Is blockchain really finished?

Is blockchain really finished? In one word, in my honest opinion, in a statement that might turn out to be wrong in the future, I would say that YES, blockchain is really finished, but… First of all it is important to clarify the definition.

Many are referring to blockchain, but often they mean Distributed Ledger Technology, which is perhaps the correct terminology to define any solution that aims to share records of the same data among all the participants.

DLT, or Distributed Ledger Technology is like music. You can deliver it through vinyl disks, musicassettes, CD, DVD, MP3 or Spotify. It doesn’t change the industry.

The medium changes. In my opinion, blockchain is like the vinyl disk, a first clumsy attempt to introduce a new way of storing data.

One step back. Blockchain was popularised by the famous whitepaper of Satoshi Nakatomo when he or she launched Bitcoin in January 2009. Hence, the crucial need to efficiently and effectively tracking all transactions in a way that at any point in time, any stakeholder could access, verify or validate such data. In Satoshi’s vision, similarly to what Bitcoin SV is currently advocating, the purpose of blockchain was to provide the world with a currency that did not need a central authority to oversee, control or validate transactions. That was the idea.

Fast forward a few years and you find on the stage of a myriad of blockchain and cryptocurrency conference, a hoard of founders, co-founders, CEOs and CTOs, announcing new creative uses of blockchain. Over 99 per cent of them turned out to be a complete nonsense. Mainly because the attributes of blockchain that were so proudly portarited turned out to be a gigantic misrepresentation of reality.

For instance we were told that blockchain is transparent. Well, it depends. It is encrypted for a reason right? What does it mean practically? That this number 4ad04be9a17eb4065db18507e916fbfe8 represents a transaction between this wallet 1Dtc82t2NyCRakAbQczpMqbW12 and this wallet 1Dtc82t2NyCRakAbQczpMssdd.

The only transparent thing about this transaction is that the amount was 0.0113257 BTC, hence very likely to be performed by a trading robot who would care to stay up in the middle of the night to trade 40 bucks worth of Bitcoin, or about 1 per cent of its value. Sounds pretty much an automated crypto arbitrage to me.

We were also told that blockchain is very safe. However the enormous amount of hacks should have by now disproved such statement. Truly banks are safer.

Lastly we were told that it was fast and scalable. Some pitches I attended claimed to be able to perform 1 million transactions per second.

That’s over 30 trillion transactions per year, given that there are less than 8 billion humans on earth, that gives ample room for 10 transactions per day for every human being on earth, of any age. Great to have that, but reality check, it will never happen on blockchain. Blockchain enthusiasts are very loud, so they seem to be a lot, but they are actually very very few.

And one final blow to blockchain: the largest majority of ideas and use case proposed for blockchain consumption, could have been easily done on a normal server.

I wonder, if blockchain was so useful and potentially so profitable, how come Google did not launch Google Blockchain. They are supposed to have the best engineers in the world. So what held them back? A blockchain fan would argue that big corporates are too old and slow (they love to say that, they love to call them dinosaurs). My gut feeling tells me that Google simply does not deem blockchain as useful or profitable as we are all supposed to believe.

DLT is all but finished, I am quite sure about it. But its original way of being delivered, blockchain is at the end of the road and I do not see how it could become relevant, given that it has been around for 10 years. Some technologies are just technically good, but practically useless. Do you remember the blu-ray disk?

Phenomenally huge storage at that time, extremely powerful in terms of delivery, perfect for a real cinematic experience at home. Turned out that in order to appreciate such quality, you needed to have a television set able to support it and a special DVD reader able to play it, but hey, there is a simpler, faster and cheaper way to do that: video streaming.

In the same fashion, blockchain has great potential, but it is useless at its core. Let us wait and see how the next Distributed Ledger Technology will be able to understand the needs of the users, not only satisfy the nerdy imagination of programmers.