Before getting stuck in here, a bit of context. On Dec 21st, a certain Kai Stinchcombe, CEO of True Link Financial Banking, wrote a lengthy article on December 21 which has since gone viral.
In that article, Stinchcombe argues why he believes that the Blockchain is overhyped and, to judge from some of his points, perhaps even redundant.
We’re going to reply to some of those points raised in that article which, as it happens, we felt was soundly argued in parts and expressed points which we understand but disagree with at the same time.
We explain why we disagree below. This is essentially an open letter to Mr Stinchcombe. If he reads this and decides that he would then like to reply, we’ll be happy to debate the subject further.
Why the Blockchain IS Revolutionary
I think there’s two aspects that need to be addressed here. Firstly, a quick discussion of what the blockchain is and what it brings to the table. Secondly, I’d like to mention very quickly some examples of revolutionary solutions that I have come across from blockchain start-ups who are undertaking ICOs, or token sales (they are the same thing despite any silly claims to the contrary), to raise capital for their project.
I have ripped through three dozen white-papers over the last six months or so and talked with countless teams and developers about where they are taking their products. I have some insight here, then, which it might be useful to share with you. I do appreciate that, nothing as of yet, has experienced mass adoption. But I’m utterly convinced that this is really only a matter of time. If you read on, you’ll understand why I say that.
I would also like to make clear that I am conscious of the fact that most ICOs are concept sales. That said, so was the internet in the early 70’s. So concepts can be valid even if, admittedly, that’s not always the case – and there are plenty of examples of invalid concepts within the blockchain space. That is not being disputed here by any means.
Moving on, let’s just quickly outline why the blockchain is revolutionary. A peer-based consensus mechanism, be that proof-of-work, proof-of-stake or proof-of-whatever, has brought a paradigm shift in how we can go about handling data and processes.
Suddenly, we now have the ability to make data intamperable at minimal cost and in a way that is completely transparent to everyone. I’m not aware of any other technology that offers that capability. And I have seen first-hand teams working on the development of new products and services that are bringing the implications of these properties to industries that are in desperate need of them, along with new ones that are emerging on the back of them.
Some Concrete Examples of Blockchain Products
Take a look at data privacy, as an example. DataWallet and Datum, for instance, who are creating a blockchain-based platform which allows online users to expose how much of their own personal data will be exposed to the world outside. DataWallet, as it happens, is an existing business that works under a centralised model. But, having identified the benefits of a blockchain-based solution, they are now migrating.
It seems highly unlikely to me that anyone would leave behind an established, working model in order to migrate to a new solution if there was even a minor risk that it would undermine the business.
A blockchain-based solution, in this instance, doesn’t merely tackle the issue of how personal data is hijacked by monoliths such as Facebook and Amazon et al. But it brings the ability to offer built-in incentives – tokens – that encourage people to take an interest in governing their own data.
In other words, online privacy which is almost non-existent (at least not without some very hard work and some sacrifice from principled users) now becomes almost trivial to implement. The fact that these products are not fully developed nor adopted by the masses at this stage merely reflects the stage of development that the blockchain finds itself in.
You might say that the Blockchain is ten years old, but really it is only in 2017 that its potential to offer a wave of new services and products has emerged. Yes, there are opportunists. However, there are plenty of legitimate projects out there and, some of them at least, are about to change the world.
If you’re still not convinced, have a look at ClearPoll – see my original review here on Steemit if you can spare the time. Look at the problems it addresses in the polling industry, look at the solutions brought by the blockchain – data intamperability and complete transparency of polling results and methodology – and tell me how or why this cannot be taken seriously?
This is Really Only the Beginning
You point out that you’re sceptical about Bitcoin’s ability to scale, about the Blockchain’s ability to scale, as well as your scepticism on the ability of the Blockchain’s ability to offer micro-payments. But there are real solutions being envisaged for all of these things and they are being implemented as we speak.
I understand one motivation for the scepticism – there is, as of yet, no mass adoption for any of these revolutionary products that mostly exist as concepts right now. But the simple law of large numbers will address that. One estimate I saw put the number of blockchain start-ups using tokenised sales (ICOs) as their main method for raising capital at 1600.
It would be astonishing if every single one of these blockchain-based services and products failed. On the other hand, what is likely to happen is that we will see somewhere between five to twenty percent of these ventures execute well. And they are collectively on the verge of disrupting industry and government. And I suspect this will all become somewhat more tangible over the next two years.
Just today, we reported on one blockchain start-up that is looking to develop a solution for the transfer of property deeds and land registry certificates. As soon as you put land registry certificates onto the blockchain, you essentially bring to the table the ability for countries currently experiencing high levels of corruption within public office to eliminate at least some of that corruption.
I know of no other solution to this very real problem. I recall meeting one guy in Thailand who, when returning home to his Thai wife after two weeks abroad, knocked on the door of his own house to find a face answering that door that he simply didn’t recognise.
The guy ended up in a prolonged discussion with the new occupant, the latter explaining that he had bought the house from his wife the previous week. “But the house was in my name,” the guy told the new occupant. They went off to the land registry office where they were unable to find any paper trace of his previous ownership of the property. Thanks to a bribe, his wife had been able to replace the original deeds with those in her own name in order to sell the house in her husband’s absence.
Using a blockchain solution, if a bribed official tries the same thing, there is now at least an intamperable record of the changes being made.
I’m really just picking out very thin examples here. The Blockchain’s implications are overwhelming. Retail, banking, voting, and communication – I’m witnessing right now the development of new solutions which will be hitting the market for each of these in the next few months.
Even entertainment is set for some serious disruption. Check out the White Rabbit proposition which proposes a model whereby film and television producers can integrate their content into a single-access virtual library in order to sell their films and television series on the fly without having to compromise existing content distribution models, and where users now have potentially one single point of access for all cinematic content coming from a plethora of content producers.
Once again, I can’t see how a streamlined solution like this can be developed without the Blockchain.
Try the Internet for a Comparison
HTTP and HTML were both invented sometime in 1990. Whilst there were less than 200 websites in 1993, a figure which then jumped to just under three thousand in 1994, even then no-one really had any idea of what lay ahead.
Some people were shouting from the sidelines that something was happening, here was something that was about to change the world. That message was mostly ignored, and some people even countered that it was all a bit exaggerated. And the position they took at that time was entirely understandable.
Today, it’s just as understandable that there are naysayers like yourself who are not convinced by this blockchain phenomenon. But we are at the 1994 stage. The evidence is far too overwhelming to be in denial.
It’s happening. It’s growing. By the end of 2018, there may well still be plenty of sceptics. By the end of 2019, however, I suspect that all of that scepticism will have vanished.
If I’m wrong like the hundreds of thousands of others out there who share the same outlook as I do, I think we’ll need something more than a simple pointer to some examples of failed blockchain start-ups.