I was right about blockchain
Blockchain was a bubble that brought together the worst of human nature: opportunists seeking to get rich quick and leaders looking for simplistic answers to complex problems. Since blockchain and the original cryptocurrency, bitcoin, entered our collective consciousness there has been a lack of healthy scepticism to be found in media or across the mountains of analysis. I have written and spoken extensively on the topic and feel somewhat vindicated by the events of the last year.
I recently rewatched an old interview from my time as a semi-regular Sky News guest in 2016 discussing the lack of strong cryptocurrency foundations. This interview could have been recorded yesterday as we were talking about the need for real-world application, criminal activity, regulation, and environmental impact which are all just as relevant today as then! I was also on radio at about the same time calling blockchain “the most carbon polluting technology that we’ve invented in the last 30 years”!
A quick online search throws-up a number of such interviews, reports and articles against my name including in collaboration with some pretty eminent leaders across business. I took a more analytical view on the downside of blockchain in my blog of the time as it has long worried me when a complex idea is simplistically extrapolated by executives, and indeed the general public. I’ve also written before that leaders need to understand the details of technology which is where ideas ultimately succeed or fail.
It turns out my scepticism was justified as the last year has seen the end of the hype. However, I have always hedged my bets and said that the technology can guide us to something better. I had assumed that blockchain had received so much investment that we would see the “block washing” of projects from websites to databases! Now I’m not so sure, as blockchain has gotten a bad reputation. It is not just cryptocurrencies such as bitcoin that have taken a hit but also blockchain projects in general with many high-profile initiatives being shut down and even more being quietly shelved.
The problem is now we risk going too far to the opposite extreme and writing-off much that has been learnt. Just last year I applauded the general move to more “proof of stake” models bringing distributed ledgers into the mainstream and improving their efficiency. Distributed ledgers, a more general way of describing blockchain, and edge computing architectures offer a range of architectural solutions to some of our most intractable computing challenges.
Even though cloud computing is continuing to enable amazing solutions, it is time to think about what comes next. Early in the evolution of cloud offerings the electricity utility metaphor was commonly referenced, arguing that you don’t generate your own power so you shouldn’t house your own compute capacity. As the last decade has progressed, so has the model for generating electricity with the rapid growth of rooftop solar and distributed wind farms. The evolution of the energy grid is likely to similarly serve the conversation on the future of computing architectures with a far greater balance between cloud-enabled platforms and distributed data and rules supported by edge computing.
As Generative AI, such as ChatGPT, continue to take the world by storm, people are rightly worried about their privacy. Any interactive platform that reaches into our homes and centralises the information that we’ve shared is open to abuse. Codifying that which has been learnt by AI tools into distributed rulesets, such as blockchain has pioneered, has the potential to offer-up some of the solutions for the future. But while blockchain has been touted as the answer to the distributed data and rules, it can’t be while using inefficient algorithms.
Released from the hype of blockchain, we can realise more generalised distributed models and build new foundations for the next generation of the Internet. This is the promise of Web3, a model with the potential to combine large scale databases with distributed content and commercial transactions which could speed up interoperability in everything from the Internet of Things (IoT) through to financial reporting. Combining cloud with edge computing and distributed ledgers reduces latency and increases privacy options.
Any technology that is purely based on greed, as the cryptocurrency pyramid appeared to be, is unlikely to survive. But like other bubbles before, there is much that we can salvage and build on that will set up more distributed, robust, and sustainable businesses. In the case of blockchain, less time on getting rich and bypassing regulation and more focus on supporting privacy and productive innovation can only be a good thing.