NEW YORK—If you are still confused about what blockchain is and what it can be used for, don’t worry. The crypto industry is still trying to figure that out, too.
Here at Coindesk’s Consensus 2019 conference, fledgling software companies pitched new pieces for future incarnations of blockchain, while new advocacy groups discussed why it is important to normalize the technology for customers and regulators, and economists said they were skeptical of the whole thing.
To be sure, there is a lot of development going on in blockchain, cryptocurrency, coins and security tokens and distributed ledgers, as vendors look to improve on basic plumbing of blockchain frameworks like Ethereum and Hyperledger or make their own.
For instance, Polymath is building a security token blockchain in collaboration with Ethereum pioneer Charles Hoskinson. Dubbed Polymesh, the new platform will be designed specifically for companies that want to create regulation-compliant security tokens. The idea, Hoskinson said, is that now small businesses “can use templates and not have to hire armies of lawyers and bankers to do business.”
Another company, Bloq, added to its Enterprise and Labs platforms with the new Bloq Cloud, dubbed as blockchain infrastructure as a service, which among other things will enable different blockchains to work together. Likewise, Ark announced Ark Deployer, dubbed a point-and-click blockchain, which is due out in Alpha later this month. Yet another vendor, Blockstack, is creating its own ecosystem that promises to give users control over fundamental digital rights of identity, data-ownership, privacy, and security, said co-founder Muneeb Ali in a session here.
Acceptance is growing for using cryptocurrency as a means of exchange, and payment network Flexa launched its “Spedn” wallet app that will let people buy goods with cryptocurrencies online or in physical stores. The technology currently supports bitcoin, ether, bitcoin cash, and the gemini dollar, and it’ll work at retailers including GameStop, Nordstrom, Whole Foods, Caribou Coffee, Jamba Juice, and Crate and Barrel.
Rallying for blockchain
All these projects are still young and relatively untested, which is putting pressure on the communities of stakeholders and developers around the projects to advocate to grow them in every way, from number of developers working on code to businesses using them, and to putting it into clear language for regulators to understand.
A major initiative is called the Web 3 Foundation, whose mission is to see a fully decentralized web come to fruition, one that is protected by mind-bogglingly complex cryptographic protocols such as Zero-Knowledge Proofs. One company betting on ZKP is privacy vendor QEDIT, which late last month announced it is working with VMware, Ant Financial, and RGAX to develop privacy applications.
Another brand-new organization is the Open Money Initiative, which is seeking to leverage blockchain and cryptocurrency to help citizens in closed or repressed economies, such as Venezuela. But as Jill Carlson, co-founder of OMI, acknowledges, such technology is not enough to help such difficult situations. “We want it to be a technology problem,” she said. “But it's really a human problem.”
Also, the Enterprise Ethereum Alliance (EEA), the standards body working for businesses using Ethereum’s code, released a third version of its client specification, as well as updates on privacy and performance.
In search of use cases
Despite active development and passionate proponents, the real obstacle to widespread adoption of blockchain is enterprise use cases. IBM have been talking up blockchain for years, but there have not been many new ideas beyond supply chain management. IBM has a major project ongoing with shipping giant Maersk.
At Consensus, Kimberly Harrington, Blockchain Center of Excellence Leader at Bayer, discussed some live deployments the company has around tracking and tracing of seeds.
“Traditionally, when you think about transparency, the concept is ‘farm to fork,’ but we start before the farm,” she said. “The seeds are produced and leave our organization and then go into fields with growers, where there’s an entire process that transforms that product into something that’s sold. [Blockchain] really helps to get all of the parties to coordinate and participate more efficiently.”
Other compelling use cases show up in healthcare, where organizations are testing blockchain for managing clinical trial data, and another for physician credential management. That one is done by Hashed Health, which is looking to help organizations cut administrative costs, said Corey Todaro, the company’s CTO.
Economists on a panel made the distinction between cryptocurrencies like bitcoin vs. blockchain platforms that enable users to get things done. “Count me as a crypto skeptic,” said Harvard University economist Eric Maskin. “It’s a dubious store of value and I worry that we’re replacing government fiat currency with private money.”
The question of “Why Blockchain At All?” also was considered. Joshua Gans, Professor of Strategic Management at the University of Toronto, said, “You have to boil it down to, what is this reducing the cost of?” he said. “There are two places. One is the cost of verification [of a transaction] and the cost of building out a network. The rest is supply and demand.”
Crypto visions pointing the way forward
At the end of the day it was not clear if anyone was closer to agreeing what it all means beyond the price of bitcoin. One thing is for sure: The people who are working around blockchain are true believers that their technology will someday become pervasive, whatever the eventual use case. The blockchain is inevitable, they say.
Perhaps that is why Ken Liu was such an inspired keynote speaker this week. Liu is a Hugo Award winning science fiction writer, a lawyer, and also a coder. He has unique a perspective on blockchain’s role in a hypothetical future where “code is law.”
“I got interested in the potential of blockchain and bitcoin to transform a lot of the problems that we have in contemporary life. I wanted to explain them in ways that are beyond the usual stories, that cryptocurrencies are only used to buy drugs, which seems to be the narrative in popular culture,” Liu said.
There are other stories about blockchain, like distributed, transparent, securely executed smart contracts, and utopian visions that blockchain will eliminate government corruption and enable democracy to flourish, he said.
“A storyteller can make up all kinds of stories and doesn’t need to back it up with any kind of real implementation,” he said. “I really have to caution the rest of you against believing your stories as though they are the truth.”
The only way forward is to invest in and work toward the vision, and then see what happens. “You have to put in the work to enjoy the result,” he said.
Scot Petersen is a technology analyst at Ziff Brothers Investments, a private investment firm. He has an extensive background in the technology field. Prior to joining Ziff Brothers, Scot was the editorial director, Business Applications & Architecture, at TechTarget. Before that, he was the director, Editorial Operations, at Ziff Davis Enterprise. While at Ziff Davis Media, he was a writer and editor at eWEEK. No investment advice is offered in his blog. All duties are disclaimed. Scot works for a private investment firm, which may at any time invest in companies whose products are discussed in this blog, and no disclosure of securities transactions will be made.