The fact that we want blockchain to solve every problem is a problem
Blockchain technology came part and parcel with cryptocurrencies, and no matter how hard the institutionalized investors, bankers, and regulators try, there is no splitting them. This already gives insight into what the best use of Blockchain technology is – currently – according to Lorien Gamaroff. If Gamaroff is of the opinion the cryptocurrencies are the killer app for Blockchain, then, one of the founders of this ecosystem, Vitalik Buterin, the creator of the Ethereum Blockchain, begs to differ on a higher level.
Buterin, in his blog: ‘ The Value of Blockchain Technology’ vehemently denies the entire notion of a ‘killer app’ for Blockchain. “First, there will be no “killer app” for blockchain technology. The reason for this is simple: the doctrine of low-hanging fruit. If there existed some particular application for which Blockchain technology is massively superior to anything else for a significant portion of the infrastructure of modern society, then people would be loudly talking about it already,” Buterin explains. He does cede that perhaps there is a killer app out there that has already made its mark on Blockchain technology, and indeed, is being spoken about – loudly. The cryptocurrency revolution, or at least the Bitcoin one, has picked up some of the hype and attention from ‘modern society’.
“One can quite reasonably argue that the closest things that we will ever have to “killer apps” are precisely those apps that have already been done and recited and sensationalized ad nauseam: censorship resistance for Wikileaks and Silk Road,” Buterin adds. “Silk Road, the online anonymous drug marketplace that was shut down by law enforcement in late 2013, processed over $1 billion in sales during its 2.5 years of operations, and while the payment-system-orchestrated blockade against Wikileaks was in progress, Bitcoin and Litecoin donations were responsible for the bulk of its revenue”.
“In both cases the need was clear and the potential economic surplus was very high – before Bitcoin, you would have no choice but to buy the drugs in person and donate to Wikileaks by cash-in-the-mail, and so Bitcoin provided a massive convenience gain and thus the opportunity was snatched up almost instantly”, Buterin concludes. It seems that, despite shunning the idea of a ‘killer’ app, he sees how cryptocurrencies were used, on the Blockchain, for convenience in a financial marketplace where there was no other option.
The diversification of Blockchain technology to solve every little problem is damaging to the technology. In its true formative years, since the days of Bitcoin and its original Blockchain, the foundations have been laid to target Blockchain technology at the financial sector, building cryptocurrencies to be an alternative to traditional currencies.
There have been other examples where Blockchain and their associated cryptocurrencies have started laying a path in the financial sectors, such as speeding up cross-border payments, even helping with inter-bank payments with regards to the Ripple Cryptocurrency. Additionally, online identity management, which is being worked on by Microsoft currently, and loyalty and rewards programs in the financial sectors have started delving into Blockchain’s potential.
However, as the ecosystem has expanded, smaller companies and startups have built up the popularity of ICOs. This has led to people seeing it fit to build, or replicate, blockchains with small changes in order to solve some more of the world’s inane problems. This frenzy of ICOs and use of blockchain tech has seen companies casting the net so wide as to what blockchain’s purpose should be that they are really starting to encroach on areas where databases would be equally adept.
The promise and potential of blockchain is seemingly endless, especially considering the smart contract applications that come from chains such as Cardano and Ethereum, but the space is becoming congested and tiresome.
