Is Hype The Real Currency of The Blockchain?
April 25, 2017, Tapio Mäkelä
The Blockchain is the technology behind cryptocurrency Bitcoin. It is one of the most discussed emerging technologies by the financial sector and seen as the next technological revolution by social and cultural visionaries. But is it hype, or a real technological change in progress?
The Blockchain is a shared ledger, a database that gets distributed on a vast number of computers. Each entry into the database gains trust for being part of a sequence in a blockchain, which is distributed widely and is therefore impossible to hack.
The Blockchain is far from a perfectly functional technology, but it shows promise for solving several problems with the Internet, such as trust in an information source and reliability of transactions.
Blockchain is one of the key areas of research and speculation currently in the field of #FinTech, Financial Technologies. At first banks and financial institutions considered Bitcoin as a threat. Now they look at its’ underlying blockchain technology as a means to turn their own systems more efficient. This has led to the development of private blockchains that exist within particular computer networks, not out in the public like Bitcoin blockchain.
Social visionaries believe the Blockchain can enable cheaply and reliably services such as micro banking, just distribution of payments, and give access to online economies to many who are now marginalised. An application platform that shows sings of the emerging solutions is called Ethereum, "a decentralised platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference”.
Interestingly, when you read about the Blockchain, it is often representatives of companies that have invested in it that boost it, hype it up. Critics claim that the open source code for Blockchain takes a long time to evolve into a technology that will be widely deployed. A transaction may currently take ten seconds or more to get distributed within a blockchain.
Gideon Greenspan believes that the Finance sector will build its’ own walled garden for its blockchain(s): “They may have some problems with the radical transparency that these systems have. Essentially it is a way for multiple companies or entities to co-ordinate with each other via a database. … Idea of a private blockchain has nothing to do with this utopian vision of a censorship free transactions”.
Internet visionary Don Tapscott considers the blockchain to have equal potential as a technology than the birth of the World Wide Web had in the 1990s. It may alter hierarchy of information, and in particular enable new kinds of organisations to reliably manage and transfer funds or other assets on the Internet. Transparency of the public blockchain may prove to be difficult for the organisational culture of banks and less democratic nation states.
"It makes me think we’re at one of those times in technological, economic, and social history where the sky is the limit.” —Steve Wozniak, cofounder, Apple Computer and chief scientist, Prime Data
Professors at Harvard Business Schook, Marco Iansiti and Karim R. Lakhani see that “if there’s to be a blockchain revolution, many barriers—technological, governance, organizational, and even societal—will have to fall. It would be a mistake to rush headlong into blockchain innovation without understanding how it is likely to take hold.”.
Furthermore, Iansiti and Lakhani emphasise that the Blockchain is not a disruptive but a foundational technology that will take years, if not decades to become a reality.
Be it hyped up or not, the Blockchain is definitely worth following up, as it represents a different way of thinking in linking people, assets and trust.