By Simon Harman
The blockchain industry was on everyone’s radar in 2017 and 2018, as the technology garnered public attention and cryptocurrencies experienced another explosion in retail investment. At the same time, the industry gained as many critics as it had advocates – with opposing claims that blockchain technology was either little more than digital snake oil or a silver bullet for the world’s problems.
While critics may have good reason to believe that blockchain technology is all hype and no substance, as industries mature, projects start to deliver substantive solutions and real-world applications become clearer. All that is needed is time and patience.
From outside of the blockchain sector, it is clear why critics have labelled the technology 21st century snake oil. Similar to the dot-com bubble, the explosive growth of the blockchain sector in the past few years has seen numerous projects raise huge amounts of capital only to flounder in the early stages of development.
Distrust of the sector has hardly been helped by dishonest actors cashing in on public appetite, with projects such as OneCoin or Bitconnect raising hundreds of millions of dollars only to be unveiled as Ponzi schemes and shut down by authorities. Worse still are the hundreds of more convincing companies promising revolutionary and ambitious products, only to squander the funds raised and fail to deliver any product whatsoever. It is easy to see, in this context, why members of the public may have become disillusioned with blockchain technology as a whole.
However, despite the many headlines highlighting the growing pains of the blockchain sector, progress is always being made. The actual usage of blockchain technologies is steadily increasing, and research into privacy, novel cryptography techniques and ancillary technologies such homomorphic encryption, which could all have a huge impact on cybersecurity, have all been rapidly accelerated thanks to the rise of blockchain technology.
However, from our point of view in 2019, skeptics who wrote off the value of online business based on the failures of early adopters, such as Pets.com, seem incredibly short sighted. Much like the online space of the ‘90s, the blockchain sector now needs time to develop services that are suitable for adoption. Project teams will need to ignore the headlines and the hype that surrounds them, and focus on the development of substantive products, as opposed to the false promises of infallible solutions to every problem.
In an industry saturated with media interest, public enthusiasm and speculative investment, it can be easy for project teams with good ideas to lose sight of their original goals. By ensuring that scheduled project milestones are met, are regularly revisited, and that progress is gauged based on results and not solely on the value of a cryptocurrency, developers can sustain the focus necessary to deliver.
Based on its dedication to open-source knowledge-sharing, the blockchain industry has been home to high levels of technical collaboration. However, project teams must focus on the real-world value of more formal collaborations, as many “partnerships” fail to go beyond simple MoUs (Memorandum of Understanding"), using partnership announcements as a vehicle for hype, as opposed to productive relationships.
For example, the potential for blockchain technology to ensure the credibility of information transacted online has already been recognized by security agencies around the globe, with Israel’s Security Authority integrating a blockchain-based solution into its cybersecurity efforts.
Governments, software firms and corporations the world over will find ways to leverage this wonderful piece of applied cryptography. However, the fundamental ideology behind the rise of Bitcoin in the first place will always remain attractive: decentralization for the purposes of free speech and as an alternative to the fiat currency system remain niche, but are still viable arguments and real-use cases for blockchain technology.
As 2019 unfolds, we will see many of the weaker projects within the blockchain sector fade away as public interest in cryptocurrencies continues to decline, as it did in the closing months of 2018. As many of the “all style and no substance” actors are squeezed out of the industry, they will take much of the “hype” with them. The projects that remain will be the ones that have focused on responsible development and sustainable growth. They will now have the time to build mature products with tangible, useful applications, proving that the blockchain is more than just the biggest buzzword of late 2017.
While the naysayers and “hypesters” continue to clash, hundreds, if not thousands, of dedicated, intelligent and passionate researchers, developers and entrepreneurs are doing excellent work in the blockchain space day in and day out. Eventually, these teams will launch products that will genuinely change the world. All we need is time. While the Pets.coms of the world flounder, the Googles are slowly but surely emerging. Watch this space.
About Simon Harman
Simon Harman, Co-founder and Project Lead at Loki, has been heavily engaged in the blockchain industry since 2015, before making the move into blockchain development. His broad skill set and adaptability has led him to be an influential member of the cryptocurrency scene.