A Blockchain Study Finds 0.00% Blockchain Success Rate. The study reported also reported 0 vendor call backs when asked for evidence of implementation.
Though Blockchain has been touted as the answer to everything, a study of 43 solutions advanced in the international development sector has found exactly no evidence of success.
Three practitioners including erstwhile blockchain enthusiast John Burg, a Fellow at the US Agency for International Development (USAID), looked at instances of the distributed crypto ledger being used in a wide range of situations by NGOs, contractors and agencies. But they drew a complete blank.
“We found a proliferation of press releases, white papers, and persuasively written articles,” Burg et al wrote on Thursday. “However, we found no documentation or evidence of the results blockchain was purported to have achieved in these claims. We also did not find lessons learned or practical insights, as are available for other technologies in development.”
Blockchain vendors were keen to puff the merits of the technology, but when the three asked for proof of success in the field, it all went very quiet.
“We fared no better when we reached out directly to several blockchain firms, via email, phone, and in person. Not one was willing to share data on program results, MERL [monitoring, evaluation, research and learning] processes, or adaptive management for potential scale-up. Despite all the hype about how blockchain will bring unheralded transparency to processes and operations in low-trust environments, the industry is itself opaque.”
Quick Check
I just did a quick search myself: Where is Blockchain Used?
The search turns up pages and pages of links but not a one of them had an answer. A few click-bait articles had promise but were all hype and no reality.
- Motley Fool: 20 Real-World Uses for Blockchain Technology The article gave real world potential uses, many of them I agree with. However, there is nothing used in the real world today other than crypto-related.
- CoinIndex: What is Blockchain Technology and Where is it Used Right Now? The article announced “Blockchain technology is silently revolutionizing the world.” It was all hype, no reality.
- ComputerWorldUK: Real-world uses of the blockchain today, from supply chain to equity Once again, the article hyped up things companies are working on. They were all pilots, proof-of-concept tests, or theories. The article is nearly impossible to read. It seems to have some sort of automated scrolling that keeps a video pinned at the top. Eventually, I gave up. The idea was to slowly feed you one idea at a time while you had to suffer through many ad displays waiting for the next failed use that isn’t quite there yet. One item seemed close, an airline rewards program. Then again, blockchain is hardly a requirement for a rewards program. Even if that use does get off the ground, I see little added benefit.
My simple test agrees with the study. At the moment, blockchain is all hype and no reality.
That said, I do believe blockchain has a future. It seems perfect for low-volume, high-value transactions such as mortgages, deeds, loan agreements, etc.
The future value is in blockchain, not cryptos.
Mike “Mish” Shedlock
It has been successfully implemented by organized crime
What about OSTK and tZero?
Blockchain was, is, and always will be yet another incarnation of “The Emperor’s New Clothes”. And somewhere, Hans Christian Andersen is laughing hysterically, assisted ably by P.T. Barnum, George Santayana, Lewis Carroll, and Franz Kafka.
I wonder what pct of investors understand what bitcoin or blockchain is, I would guess < 10%. All I need to know it’s a bubble.
What real life problem (that enough people care about) does blockchain solve?
Absence of evidence is not evidence of absence.
The tropes about “high cost, slow transaction time” are being solved by protocols like Lightning to settle small transactions off the main chain.
Real development of apps to solve use-cases effectively started in 2018 with the bubble and we are in early 2019. Dev takes time.
A better study would be the number of FTEs of devs working on Blockchain app dev.
“number of FTEs of devs” Remember the dot com bubble? Lots of software written that ended up in the trash can.
It sure did. Except for the most valuable companies on planet earth like Amazon and Google for example which have redefined commerce.
Also you couldn’t buy shares in the protocol (aka “the Internet”) – but if you could have it would be worth multiples.
Whereas now you can buy Bitcoin.
“Slow transactions” is not a fundamental problem with Bitcoin. Transactions in physical gold, are even slower. Yet still remain the, literal, Gold standard.
Rather, it is Bitcoin’s now more-problematic-than-anticipated anonymity guarantees, which poses a headache. As well as it’s reliance on mining protocols highly prone to centralization.
Satoshi, at least in public, seem to have assumed highly decentralized mining, essentially distributed the way general purpose CPUs were/are (a bit naive, perhaps, considering how little of a typical CPU is being exercised by Bitcoin mining…). As well as practically unbreakable anonymity, even by state and multinational actors. Compromise those two, and the dual protections, from both collusion and coercion, which made Bitcoin so promising, starts looking a bit frail.
Well said. Mining concentration is an existential risk. But if Bitcoin survives, its value will increase exponentially (like the internet’s value has) and there will be ample reward to maintain miners.
The anonymity part isn’t as important for institutional use-cases.
Anonymity was not the important part – the important part is that in a multi-ledger “trust” based system, actors need to establish identity to carry out a transaction (i.e. sign a credit card slip), but because identity in that system can be faked a certain percentage of transactions will be fraudulent – and the whole costly activity of establishing/verifying identity and the cost of fraud (since that system cannot be perfect) imposes a dead-weight loss economic cost. The magic of bitcoin was that there is a zero percent chance of moving a coin out of a wallet without the key – thus no need for the whole identity thing. In reality, there is nothing anonymous about using Bitcoin in an institutional use-case (which many bad actors learned the hard way).
Blockchain remains a solution looking for a problem. Conceptually its a great idea, but so far there are big issues such as transaction costs that make “real blockchain” a future dream. It remains an interesting technology. However, let’s not forget how it has been used so far by companies far and wide: Hype! You added cryptocurrency and blockchain to any press release and presto — you got 10x the coverage you would get otherwise. I know “salesguys” who literally reviewed client documents and added “security provided by blockchain — not having a clue what they were talking about (or care for that matter)
Hi Mish, just curious when you say you see potential use for Blockchain for deeds and mortgages, why would blockchain work better than the current system?
I have the same question. I thought the feature of blockchain is that it allows anonymous and/or untrusted participants to transact. Is that a problem needing a solution in property transactions?
Not unless property rights enforcement is also anonymous and distributed. Otherwise, the only version of the ledger which matters, is the enforcer’s.
Well, apparently it is vital in the production of long island ice tea. Or at least good for a temporary doubling in one’s (LBCC) stock price.
“That said, I do believe blockchain has a future. It seems perfect for low-volume, high-value transactions such as mortgages, deeds, loan agreements, etc.”
Using blockchain technology is extremely expensive. So it will only find a home where lower-cost, non-blockchain solutions do not exist. Low cost solutions already exist for each of the above.
Blockchain requires crypto-coins as a source of income to ledger writers. As long as the coins have no value, blockchains can’t be a solution. And having a different coin for each solution is a disaster.
“As long as the coins have no value”. Well the US Dollar has no value and it is used as a reserve currency and to settle nearly all commerce in the USA. 🙂
Scroll to the bottom and you’ll see some business processes and customers’ use of blockchain:
Diamond Offshore say they’re using it
“I can’t help it, google “Where are self driving trucks in use” and you get some trials with licensed truck drivers behind the wheel “just in case” and a whole lot of future tense. New technology can take a long time to roll out.”
I can’t help but google at idiotic comments like that when I gave a timeframe and it is still on schedule
Yes, there’s no way to prove you wrong except wait for 5 years.
Future tense it is indeed. Believable? Yes. Fact it is not.
I dread and look forward to this change. One can believe it will make life better. But, MMs of people make a living from transportation will go through personal difficulty (to say the least). And, I wonder what a place will it be when robots control cars.
Chatting with Uber and Lyft drivers it seems as some enjoy their part time gig as much as they depend on the income.
Oracle is trying to promote production blockchain applications:
Been feeling the same about Gold and gold miners the past 3 years.
Maybe block chain can put an end to the title search scam where the bank requires a new search every time a property is sold with a mortgage.
Blockchain, the notion of decentralized ledger [of something], is a cool concept.
That said, blockchain doesn’t come free. It depends on broad adoption and commitment of the audience.
What usages would “rather” blockchain over certificate based systems (being mostly decentralized, potentially), or even simpler just have a central clearing system in place?
Put this differently, what real life problems does blockchain solve that other techniques don’t?
I can’t help it, google “Where are self driving trucks in use” and you get some trials with licensed truck drivers behind the wheel “just in case” and a whole lot of future tense. New technology can take a long time to roll out.
The whole purpose of a distributed ledger, is to avoid dependence on one, omnipotent, trusted entity.
Nothing which relies on The Mafia (or some nation state, should the two differ), as a final arbiter of who owns what, benefits in practical terms from distributing the ledger keeping track of ownership. As it is always the mob’s version of the ledger that is final. All it has to do, is tell some dude in a robe to issue a court order saying you forfeited your claim to what your version says you own, by thinking evil thoughts about some exalted mob Don.
Hence, blockchains make sense for Bitcoin et al, which were created specifically to exist above and beyond any mob or nation state, but not for real, physical deeds, which still relies on them for their enforcement.
Is there enough profit in the technology to apply it to different areas? I would think cloud computing storage would be a prime place to apply it; that is if the owners of those sites weren’t using it for their own purposes.