On May 1, 2018, the United Kingdom Parliament's Treasury Committee heard testimony on blockchain from the director of the Centre for Evidence-Based Management, Martin Walker, as well as a voting systems researcher from King's College London, Dr. Grammateia Kotsialou. The director of regulatory relations for Ripple and the Chief Operating Officer of Everledger were also present, but they did little more than product promotion.
Doubts About Blockchain
It's been said that blockchain technology is a solution in search of a problem. That is very close to the sobering perspective that Walker offered to members of the United Kingdom Parliament on Tuesday. During a two-hour hearing on digital currencies, Walker was a vocal critic of the blockchain hype, though he conceded that Bitcoin's cryptographic system (and those derived from it) have renewed interest in automating outdated systems.
Walker told Members of Parliament that many of the blockchain-based proofs of concept that exist today have performed little more than lip service to "genuine innovation." One of his colleagues apparently refers to this debacle as "innovation theater." The idea is that only the press releases matter, not the results of blockchain-based trials. Walker said that blockchain has become fad-like and suggested that many otherwise intelligent people have switched off their brains, ceasing to think critically about its functionality or widely-alleged usefulness.
His testimony is sure to rile up the most ardent cryptocurrency enthusiasts and blockchain proponents, but much of what Walker said is arguably true. Blockchain has been prescribed as a "panacea" by innumerable projects, often without regard for how other possible solutions could be better or cheaper.
Last week, US CFTC commissioner Brian Quintenz raised a similar concern that blockchain technology is being used as a "marketing ploy" by various projects. However, the commissioner also foresaw opportunities to improve the tracking of certain assets and to create secondary markets for intangible goods and services.
Walker also pointed out that many of the cryptographic concepts that are resurfacing today are, in fact, much older than many realize (for instance, Merkle Trees – also known as hash trees – were patented in 1979 by computer scientist Ralph Merkle). Revisiting and worshipping technological history is a bit of a strange social phenomenon, reminiscent of anachronistic hipsters listening to records or wearing Converse high-tops. It's a throwback to the past that frequently lacks new ideation.
Walker clearly acknowledged that "blockchain" is not a single concept anymore. Like the wide variety of automobiles that we have today, blockchain has morphed drastically from its original construction on the Bitcoin network. Now, there are many variations on validation, speed, and adoption, but "blockchain was not designed to be a generic technology," according to Walker. Many would vehemently disagree with the director.
Despite his reservations about blockchain, Walker said, it has offered one major benefit: the interest in digitizing areas that deserve automation. The attention paid to blockchain has become a "catalyst" for driving forward changes, he said, but it also risks becoming a "distraction" from authentic achievement. Still, there could be some limited instances with regard to "data consistency" where blockchain might be meaningfully utilized.
Later, Kotsialou discussed how blockchain technology could be integrated into remote voting systems, annual general meetings held by corporations, and permanent voting records. She suggested that blockchain could aid in establishing voter eligibility and keeping interim results secret during an election.
Asked how long it might be before a blockchain-based system could be used by a major corporation for a shareholder meeting, Kotsialou reluctantly estimated five years, but she made no promises.