10 Things You Should Know About Blockchains

economist

Lets dive right in.

1) Peak Blockchain hype was October 2015 when it made the cover of the Economist.  I’ve found there are a good number of people want some blockchain without knowing why.  They’re just wondering what they’re missing.  Wanting some magic beans or a silver bullet isn’t enough.  The good news there are people out there who can make sense of this stuff like Richard Brown, Tim Swanson, Ian Grigg or Pascal Bouvier.  I’d recommend talking to those guys before anyone else!

2) The famous public vs private blockchain debate is a side show.  Some will contest you can’t have blockchain without bitcoin.  Some will tell you Bitcoin is evil but we love blockchain.  They’re both wrong.  As Ian Grigg said “who are you and what do you want to achieve?” is the first question to ask. Consider that lens before listening to anyone about blockchain.

3) Gideon Greenspan’s writing on blockchain is a must read. He talks of a database that is replicated by design, and has per transaction enforceable rule sets.

4) Alex Batlin’s musings on smart contracts are also incredibly insightful. UBS actually built a working prototype of a DVLA data management solution using Ethereum

5) Microsoft offering Ethereum as a service is a sign the tools are maturing, but make no mistake, nobody is saying the tools to build Blockchain’s are complete – not even close

6) This means you can’t have an industrial scale blockchain next quarter for inter bank settlement. Sorry.

7) This doesn’t mean that’s not possible, if anything you *should* be investigating those use cases right now.  Chances are your competitors are.

8) What NASDAQ did with Linq is very interesting. Background: start-ups often don’t document initial share ownership when it is agreed in a pub or coffee shop. Problem: When an investor comes to raise a Seed, things get messy, people fall out. Solution: Store this on a Blockchain at NASDAQ which has perfect time stamps, and digital signatures and no database administrator can edit the record without signatures of the founders. Could you do this with a database? Sure, but you’d lose that audit trail.

9) What Docusign and Visa did is interesting. Get into a car, and rent it using a contract displayed on the car dashboard. You have now signed, and recorded on a blockchain for audit purposes your signature. Better than Bitcoin for tamper resistance? No. Better than current paper processes. YES.

10) A colleague described the 5 stages of Blockchain understanding. Dismissive, Curious, Incredibly excited, Understanding followed by a harsh realisation of how tough the really big changes will be to make.  There is no magic bullet, but there are a collection of genuinely novel ideas here.

In conclusion:

Transformational ROI from blockchain for corporates will take a good number of years. Smaller bits of ROI can be achieved tomorrow if you have the right buy in and strategy and partners.

There are strategies for:

a) Educating a large organisation
b) Delivering quick wins
c) Building a blockchain strategy

But they require understanding it first.