Category: Blockchain
Why Blockchain Differs From Traditional Technology Life Cycles – Daniel Heyman
Why another bubble is likely and what the blockchain space should focus on now
In the aftermath of the 2001 internet bubble, Carlota Perez published her influential book Technological Revolutions and Financial Capital. This seminal work provides a framework for how new technologies create both opportunity and turmoil in society. I originally learned about Perez’s work through venture capitalist Fred Wilson, who credits it as a key intellectual underpinning of his investment theses.
In the wake of the 2018 ICO bubble and with the purported potential of blockchain, many people have drawn parallels to the 2001 bubble. I recently reread Perez’s work to think through if there are any lessons for the world of blockchain, and to understand the parallels and differences between then and now. As Mark Twain may or may not have said, “History doesn’t repeat itself, but it does rhyme.”
Framework Overview
In Technological Revolutions and Financial Capital, Carlota Perez analyzes five “surges of development” that have occurred over the last 250 years, each through the diffusion of a new technology and associated way of doing business. These surges are still household names hundreds of years later: the Industrial Revolution, the railway boom, the age of steel, the age of mass production and, of course, the information age. Each one created a burst of development, new ways of doing business, and generated a new class of successful entrepreneurs (from Carnegie to Ford to Jobs). Each one created an economic common sense and set of business models that supported the new technology, which Perez calls a ‘techno-economic paradigm’. Each surge also displaced old industries, drove bubbles to burst, and led to significant social turmoil.
Technology Life cycles
Perez provides a framework for how new technologies first take hold in society and then transform society. She calls the initial phase of this phenomenon “installation.” During installation, technologies demonstrate new ways of doing business and achieving financial gains. This usually creates a frenzy of investment in the new technology which drives a bubble and also intense experimentation in the technology. When the bubble bursts, the subsequent recession (or depression) is a turning point to implement social and regulatory changes to take advantage of the infrastructure created during the frenzy. If changes are made, a “golden age” typically follows as the new technology is productively deployed. If not, a “gilded age” follows where only the rich benefit. In either case, the technology eventually reaches maturity and additional avenues for investment and returns in the new technology dwindle. At this point, the opportunity for a new technology to irrupt onto the scene emerges.
Inclusion-Exclusion
Within Perez’s framework, new techno-economic paradigms both encourage and discourage innovation, through an inclusion-exclusion process. This means that as new techno-economic paradigms are being deployed, they provide opportunities for entrepreneurs to mobilize and new modes of business to create growth, and at the same time, they exclude alternative technologies because entrepreneurs and capital are following the newly proven path provided by the techno-economic paradigm. When an existing technology reaches maturity and investment opportunities diminish, capital and talent go in search of new technologies and techno-economic paradigms.
Technologies Combine
One new technology isn’t enough for a new techno-economic paradigm. The age of mass production was created by combining oil and the combustion engine. Railways required the steam engine. The information age required the microprocessor, the internet, and much more. Often, a technology will, as Perez says, “gestate” as a small improvement to the existing techno-paradigm, until complementary technologies are created and the exclusion process of the old paradigm ends. Technologies can exist in this gestation period for quite sometime until the technologies and opportunities are aligned for the installation period to begin.
Frenzies and Bubbles
In many ways, the bubbles created by the frenzy in the installation phase makes it possible for the new technology to succeed. The bubble creates a burst of (over-)investment in the infrastructure of the new technology (railways, canals, fiber optic cables, etc.). This infrastructure makes it possible for the technology to successfully deploy after the bubble bursts. The bubbles also encourage a spate of experimentation with new business models and new approaches to the technologies, enabling future entrepreneurs to follow proven paths and avoid common pitfalls. While the bubble creates a lot of financial losses and economic pain, it can be crucial in the adoption of new technologies.
Connecting the Dots
A quick look at Perez’s framework would leave one to assume that 2018 was the blockchain frenzy and bubble, so we must be entering blockchain’s “turning point.” This would be a mistake.
My analysis of Perez’s framework suggests that blockchain is actually still in the gestation period, in the early days of a technology life cycle before the installation period. 2018 was not a Perez-style frenzy and bubble because it did not include key outcomes that are necessary to reach a turning point: significant infrastructure improvements and replicable business models that can serve as a roadmap during the deployment period. The bubble came early because blockchain technology enabled liquidity earlier in its life cycle.
There are three main implications of remaining in the gestation period. First, another blockchain-based frenzy and bubble is likely to come before the technology matures. In fact, multiple bubbles may be ahead of us. Second, the best path to success is to work through, rather than against, the existing technology paradigm. Third, the ecosystem needs to heavily invest in infrastructure for a new blockchain-based paradigm to emerge.
The ICO Bubble Doesn’t Match Up
2018 did show many of the signs of a Perez-style ‘frenzy period’ entering into a turning point. The best way (and ultimately the worst way) to make money was speculation. ‘Fundamentals’ of projects rarely mattered in their valuations or growth. Wealth was celebrated and individual prophets gained recognition. Expectations went through the roof. Scams and fraud were prevalent. Retail investors piled in for fear of missing out. The frenzy had all the tell-tale signs of a classic bubble.
Although there are no “good bubbles,” bubbles can have good side effects. During Canal Mania and Railway Mania, canals and railways were built that had little hope of ever being profitable. Investors lost money, but after the bubble, these canals and railways were still there. This new infrastructure made future endeavors cheaper and easier. After the internet bubble burst in 2001, fiber optic cables were selling for pennies on the dollar. Investors did terribly, but the fiber optics infrastructure created value for consumers and made it possible for the next generation of companies to be built. This over-investment in infrastructure is often necessary for the successful deployment of new technologies.
The ICO bubble, however, did not have the good side effects of a Perez-style bubble. It didn’t produce nearly enough infrastructure to help the blockchain ecosystem move forward.
Compared to previous bubbles, the cryptosphere’s investment in infrastructure was minimal and likely to be obsolete very soon. The physical infrastructure — in mining operations, for example — is unlikely to be useful. Additional mining power on a blockchain has significantly decreasing marginal returns and different characteristics to traditional infrastructure. Unlike a city getting a new fiber optic cable or a new canal, new people do not gain access to blockchain because of additional miners. Additionally, proof of work mining is unlikely to be the path blockchain takes moving forward.
The non-physical infrastructure was also minimal. The tools that can be best described as “core blockchain infrastructure” did not have easy access to the ICO market. Dev tools, wallets, software clients, user-friendly smart contract languages, and cloud services (to name a few) are the infrastructure that will drive blockchain technology toward maturity and full deployment. The cheap capital provided through ICOs primarily flowed to the application layer (even though the whole house has been built on an immature foundation). This created incentives for people to focus on what was easily fundable rather than most needed. These perverse incentives may have actually hurt the development of key infrastructure and splintered the ecosystem.
I don’t want to despair about the state of the ecosystem. Some good things came out of the ICO bubble. Talent has flooded the field. Startups have been experimenting with different use cases to see what sticks. New blockchains were launched incorporating a wide range of new technologies and approaches. New technologies have come to market. Many core infrastructure projects raised capital and made significant technical progress. Enterprises have created their blockchain strategies. Some very successful companies were born, which will continue to fund innovation in the space.The ecosystem as a whole continues to evolve at breakneck speed. As a whole, however, the bubble did not leave in its wake the infrastructure one would expect after a Perez-style bubble.
Liquidity Came Early
The 2018 ICO bubble happened early in blockchain technology’s life-cycle, during its gestation period, which is much earlier than Perez’s framework would predict. This is because the technology itself enabled liquidity earlier in the life-cycle. The financial assets became liquid before the underlying technology matured.
In the internet bubble, it took companies many years to go public, and as such there was some quality threshold and some reporting required. This process enabled the technology to iterate and improve before the liquidity arrived. Because blockchain enabled liquid tokens that were virtually free to issue, the rush was on to create valuable tokens rather than valuable companies or technologies. You could create a liquid asset without any work on the underlying technology. The financial layer jumped straight into a liquid state while the technology was left behind. The resulting tokens existed in very thin markets that were highly driven by momentum.
Because of the early liquidity, the dynamics of a bubble were able to start early for the space in relationship to the technology. After all, this was not the first blockchain bubble (bitcoin already has a rich history of bubbles and crashes). The thin markets in which these assets existed likely accelerated the dynamics of the bubble.
What the Blockchain Space Needs to Focus on now
In the fallout of a bubble, Perez outlines two necessary components to successfully deploy new and lasting technologies: proven, replicable business models and easy-to-use infrastructure. Blockchain hasn’t hit these targets yet, and so it’s a pretty obvious conclusion that blockchain is not yet at a “turning point.”
While protocol development is happening at a rapid clip, blockchain is not yet ready for mass deployment into a new techno-economic paradigm. We don’t have the proven, replicable business models that can expand industry to industry. Exchanges and mining companies, the main success stories of blockchain, are not replicable business models and do not cross industries. We don’t yet have the infrastructure for mass adoption. Moreover, the use cases that are gaining traction are mostly in support of the existing economic system. Komgo is using blockchain to improve an incredibly antiquated industry (trade finance) but it is still operating within the legacy economic paradigm.
Blockchain, therefore, is still in the “gestation period.” Before most technologies could enter the irruption phase and transform the economy, they were used to augment the existing economy. In blockchain, this looks like private and consortium chain solutions.
Some people in blockchain see this as a bad result. I see it as absolutely crucial. Without these experiments, blockchain risks fading out as a technological movement before its given the chance to mature and develop. In fact, one area where ConsenSys is not given the credit I believe it deserves is in bringing enterprises into the Ethereum blockchain space. This enterprise interest brings in more talent, lays the seeds for additional infrastructure, and adds credibility to the space. I am more excited by enterprise usage of blockchain today than any other short-term developments.
The Future of Blockchain Frenzy
This was not the first blockchain bubble. I don’t expect it to be the last (though hopefully some lessons will be learned from the last 12 months). Perez’s framework predicts that when the replicable business model is found in blockchain, another period of frenzied investment will occur, likely leading to a bubble. As Fred Wilson writes, “Carlota Perez [shows] ‘nothing important happens without crashes.’ ” Given the amount of capital available, I think this is a highly likely outcome. Given the massive potential of blockchain technology, the bubble is likely to involve more capital at risk than the 2018 one.
This next frenzy will have the same telltale signs of the previous one. Fundamentals will decrease in importance; retail investors will enter the market for fear of missing out; fraud will increase; and so on.
Lessons for Blockchain Businesses
Perez’s framework offers two direct strategic lessons for PegaSys and for any serious protocol development project in the blockchain space. First, we should continue to work with traditional enterprises. Working with enterprises will enable the technology to evolve and will power some experimentation of business models. This is a key component of the technology life-cycle and the best bet to help the ecosystem iterate.
Second, we must continue investing in infrastructure and diverse technologies for the ecosystem to succeed. This might sound obvious at first, but the point is that we will miss out on the new techno-economic paradigm if we only focus on the opportunities that are commercially viable today. Our efforts in Ethereum 1.x and 2.0 are directly born from our goal of helping the ecosystem mature and evolve. The work other groups in Ethereum and across blockchain are doing also drives towards this goal. We are deeply committed to the Ethereum roadmap and at the same time recognize the value that innovations outside Ethereum bring to the space. Ethereum’s roadmap has learned lessons from other blockchains, just as those chains have been inspired by Ethereum. This is how technologies evolve and improve.
Source : https://hackernoon.com/why-blockchain-differs-from-traditional-technology-life-cycles-95f0deabdf85
Digital Transformation of Business and Society: Challenges and Opportunities by 2020 – Frank Diana
At a recent KPMG Robotic Innovations event, Futurist and friend Gerd Leonhard delivered a keynote titled “The Digital Transformation of Business and Society: Challenges and Opportunities by 2020”. I highly recommend viewing the Video of his presentation. As Gerd describes, he is a Futurist focused on foresight and observations — not predicting the future. We are at a point in history where every company needs a Gerd Leonhard. For many of the reasons presented in the video, future thinking is rapidly growing in importance. As Gerd so rightly points out, we are still vastly under-estimating the sheer velocity of change.
With regard to future thinking, Gerd used my future scenario slide to describe both the exponential and combinatorial nature of future scenarios — not only do we need to think exponentially, but we also need to think in a combinatorial manner. Gerd mentioned Tesla as a company that really knows how to do this.
He then described our current pivot point of exponential change: a point in history where humanity will change more in the next twenty years than in the previous 300. With that as a backdrop, he encouraged the audience to look five years into the future and spend 3 to 5% of their time focused on foresight. He quoted Peter Drucker (“In times of change the greatest danger is to act with yesterday’s logic”) and stated that leaders must shift from a focus on what is, to a focus on what could be. Gerd added that “wait and see” means “wait and die” (love that by the way). He urged leaders to focus on 2020 and build a plan to participate in that future, emphasizing the question is no longer what-if, but what-when. We are entering an era where the impossible is doable, and the headline for that era is: exponential, convergent, combinatorial, and inter-dependent — words that should be a key part of the leadership lexicon going forward. Here are some snapshots from his presentation:
- Because of exponential progression, it is difficult to imagine the world in 5 years, and although the industrial era was impactful, it will not compare to what lies ahead. The danger of vastly under-estimating the sheer velocity of change is real. For example, in just three months, the projection for the number of autonomous vehicles sold in 2035 went from 100 million to 1.5 billion
- Six years ago Gerd advised a German auto company about the driverless car and the implications of a sharing economy — and they laughed. Think of what’s happened in just six years — can’t imagine anyone is laughing now. He witnessed something similar as a veteran of the music business where he tried to guide the industry through digital disruption; an industry that shifted from selling $20 CDs to making a fraction of a penny per play. Gerd’s experience in the music business is a lesson we should learn from: you can’t stop people who see value from extracting that value. Protectionist behavior did not work, as the industry lost 71% of their revenue in 12 years. Streaming music will be huge, but the winners are not traditional players. The winners are Spotify, Apple, Facebook, Google, etc. This scenario likely plays out across every industry, as new businesses are emerging, but traditional companies are not running them. Gerd stressed that we can’t let this happen across these other industries
- Anything that can be automated will be automated: truck drivers and pilots go away, as robots don’t need unions. There is just too much to be gained not to automate. For example, 60% of the cost in the system could be eliminated by interconnecting logistics, possibly realized via a Logistics Internet as described by economist Jeremy Rifkin. But the drive towards automation will have unintended consequences and some science fiction scenarios could play out. Humanity and technology are indeed intertwining, but technology does not have ethics. A self-driving car would need ethics, as we make difficult decisions while driving all the time. How does a car decide to hit a frog versus swerving and hitting a mother and her child? Speaking of science fiction scenarios, Gerd predicts that when these things come together, humans and machines will have converged:
- Gerd has been using the term “Hellven” to represent the two paths technology can take. Is it 90% heaven and 10% hell (unintended consequences), or can this equation flip? He asks the question: Where are we trying to go with this? He used the real example of Drones used to benefit society (heaven), but people buying guns to shoot them down (hell). As we pursue exponential technologies, we must do it in a way that avoids negative consequences. Will we allow humanity to move down a path where by 2030, we will all be human-machine hybrids? Will hacking drive chaos, as hackers gain control of a vehicle? A recent Jeep recall of 1.4 million jeeps underscores the possibility. A world of super intelligence requires super humanity — technology does not have ethics, but society depends on it. Is this Ray Kurzweil vision what we want?
- Is society truly ready for human-machine hybrids, or even advancements like the driverless car that may be closer to realization? Gerd used a very effective Video to make the point
- Followers of my Blog know I’m a big believer in the coming shift to value ecosystems. Gerd described this as a move away from Egosystems, where large companies are running large things, to interdependent Ecosystems. I’ve talked about the blurring of industry boundaries and the movement towards ecosystems. We may ultimately move away from the industry construct and end up with a handful of ecosystems like: mobility, shelter, resources, wellness, growth, money, maker, and comfort
- Our kids will live to 90 or 100 as the default. We are gaining 8 hours of longevity per day — one third of a year per year. Genetic engineering is likely to eradicate disease, impacting longevity and global population. DNA editing is becoming a real possibility in the next 10 years, and at least 50 Silicon Valley companies are focused on ending aging and eliminating death. One such company is Human Longevity Inc., which was co-founded by Peter Diamandis of Singularity University. Gerd used a quote from Peter to help the audience understand the motivation: “Today there are six to seven trillion dollars a year spent on healthcare, half of which goes to people over the age of 65. In addition, people over the age of 65 hold something on the order of $60 trillion in wealth. And the question is what would people pay for an extra 10, 20, 30, 40 years of healthy life. It’s a huge opportunity”
- Gerd described the growing need to focus on the right side of our brain. He believes that algorithms can only go so far. Our right brain characteristics cannot be replicated by an algorithm, making a human-algorithm combination — or humarithm as Gerd calls it — a better path. The right brain characteristics that grow in importance and drive future hiring profiles are:
- Google is on the way to becoming the global operating system — an Artificial Intelligence enterprise. In the future, you won’t search, because as a digital assistant, Google will already know what you want. Gerd quotes Ray Kurzweil in saying that by 2027, the capacity of one computer will equal that of the human brain — at which point we shift from an artificial narrow intelligence, to an artificial general intelligence. In thinking about AI, Gerd flips the paradigm to IA or intelligent Assistant. For example, Schwab already has an intelligent portfolio. He indicated that every bank is investing in intelligent portfolios that deal with simple investments that robots can handle. This leads to a 50% replacement of financial advisors by robots and AI
- This intelligent assistant race has just begun, as Siri, Google Now, Facebook MoneyPenny, and Amazon Echo vie for intelligent assistant positioning. Intelligent assistants could eliminate the need for actual assistants in five years, and creep into countless scenarios over time. Police departments are already capable of determining who is likely to commit a crime in the next month, and there are examples of police taking preventative measures. Augmentation adds another dimension, as an officer wearing glasses can identify you upon seeing you and have your records displayed in front of them. There are over 100 companies focused on augmentation, and a number of intelligent assistant examples surrounding IBM Watson; the most discussed being the effectiveness of doctor assistance. An intelligent assistant is the likely first role in the autonomous vehicle transition, as cars step in to provide a number of valuable services without completely taking over. There are countless Examples emerging
- Gerd took two polls during his keynote. Here is the first: how do you feel about the rise of intelligent digital assistants? Answers 1 and 2 below received the lion share of the votes
- Collectively, automation, robotics, intelligent assistants, and artificial intelligence will reframe business, commerce, culture, and society. This is perhaps the key take away from a discussion like this. We are at an inflection point where reframing begins to drive real structural change. How many leaders are ready for true structural change?
- Gerd likes to refer to the 7-ations: Digitization, De-Materialization, Automation, Virtualization, Optimization, Augmentation, and Robotization. Consequences of the exponential and combinatorial growth of these seven include dependency, job displacement, and abundance. Whereas these seven are tools for dramatic cost reduction, they also lead to abundance. Examples are everywhere, from the 16 million songs available through Spotify, to the 3D printed cars that require only 50 parts. As supply exceeds demand in category after category, we reach abundance. As Gerd put it, in five years’ time, genome sequencing will be cheaper than flushing the toilet and abundant energy will be available by 2035 (2015 will be the first year that a major oil company will leave the oil business to enter the abundance of the renewable business). Other things to consider regarding abundance:
- Efficiency and business improvement is a path not a destination. Gerd estimates that total efficiency will be reached in 5 to 10 years, creating value through productivity gains along the way. However, after total efficiency is met, value comes from purpose. Purpose-driven companies have an aspirational purpose that aims to transform the planet; referred to as a massive transformative purpose in a recent book on exponential organizations. When you consider the value that the millennial generation places on purpose, it is clear that successful organizations must excel at both technology and humanity. If we allow technology to trump humanity, business would have no purpose
- In the first phase, the value lies in the automation itself (productivity, cost savings). In the second phase, the value lies in those things that cannot be automated. Anything that is human about your company cannot be automated: purpose, design, and brand become more powerful. Companies must invent new things that are only possible because of automation
- Technological unemployment is real this time — and exponential. Gerd talked to a recent study by the Economist that describes how robotics and artificial intelligence will increasingly be used in place of humans to perform repetitive tasks. On the other side of the spectrum is a demand for better customer service and greater skills in innovation driven by globalization and falling barriers to market entry. Therefore, creativity and social intelligence will become crucial differentiators for many businesses; jobs will increasingly demand skills in creative problem-solving and constructive interaction with others
- Gerd described a basic income guarantee that may be necessary if some of these unemployment scenarios play out. Something like this is already on the ballot in Switzerland, and it is not the first time this has been talked about:
- In the world of automation, experience becomes extremely valuable — and you can’t, nor should attempt to — automate experiences. We clearly see an intense focus on customer experience, and we had a great discussion on the topic on an August 26th Game Changers broadcast. Innovation is critical to both the service economy and experience economy. Gerd used a visual to describe the progression of economic value:
Source: B. Joseph Pine II and James Gilmore: The Experience Economy
- Gerd used a second poll to sense how people would feel about humans becoming artificially intelligent. Here again, the audience leaned towards the first two possible answers:
Gerd then summarized the session as follows:
The future is exponential, combinatorial, and interdependent: the sooner we can adjust our thinking (lateral) the better we will be at designing our future.
My take: Gerd hits on a key point. Leaders must think differently. There is very little in a leader’s collective experience that can guide them through the type of change ahead — it requires us all to think differently
When looking at AI, consider trying IA first (intelligent assistance / augmentation).
My take: These considerations allow us to create the future in a way that avoids unintended consequences. Technology as a supplement, not a replacement
Efficiency and cost reduction based on automation, AI/IA and Robotization are good stories but not the final destination: we need to go beyond the 7-ations and inevitable abundance to create new value that cannot be easily automated.
My take: Future thinking is critical for us to be effective here. We have to have a sense as to where all of this is heading, if we are to effectively create new sources of value
We won’t just need better algorithms — we also need stronger humarithms i.e. values, ethics, standards, principles and social contracts.
My take: Gerd is an evangelist for creating our future in a way that avoids hellish outcomes — and kudos to him for being that voice
“The best way to predict the future is to create it” (Alan Kay).
My Take: our context when we think about the future puts it years away, and that is just not the case anymore. What we think will take ten years is likely to happen in two. We can’t create the future if we don’t focus on it through an exponential lens
Source : https://medium.com/@frankdiana/digital-transformation-of-business-and-society-5d9286e39dbf
Oracle apps make blockchain easier, but consortium challenges remain – Computer World
Moving beyond supply chain proof of concepts still requires bringing ecosystems of enterprises together
Bang on trend and with no shortage of afficiandoes; micro-brewery-made, artisinal beer proved a fitting use case for blockchain technology at Oracle OpenWorld last week.
Alpha Acid Brewing in Belmont, California was showcased as an early adopter of one of Oracle’s new blockchain based applications, Intelligent Track and Trace.
“We can now track materials and premium ingredients from our suppliers and analyse sensor data from the production process for each batch,” said Kyle Bozicevic, owner and brewer at Alpha Acid, which served up thousands of (free) cups of its beer range across the three day event.
“[The] application helps ensure that we are getting the highest quality hops, malt, and yeast, and enables us to create a strong narrative around our products for customers,” he added.
Big Red is hoping it will find an equally thirsty audience for the four supply chain focused blockchain applications it will make available through next year; Intelligent Track and Trace, Lot Lineage and Provenance, Intelligent Cold Chain and Warranty and Usage Tracking.
The use-case-specific SaaS applications are built on Oracle’s Blockchain Cloud Service launched earlier this year (itself based on Linux Foundation’s open source Hyperledger Fabric platform) and connect with its Supply Chain Management (SCM) Cloud, Enterprise Resource Management (ERP) Cloud and other applications.
“Typically when you think about the blockchain it’s about distributed ledger, it’s about digital signatures, it’s about smart contracts; but really the value proposition associated with blockchain is here,” said Rick Jewell, senior vice president, supply chain and manufacturing cloud applications, Oracle, at OpenWorld’s supply chain keynote.
Jewell pointed to a word cloud on a slide featuring phrases like: ‘reduce delays and inefficiencies’, ‘dispute resolution’, ‘proof of delivery’ and ‘expedite payments’.
“Just as we did with IoT – we didn’t stop with the IoT platform, we built IoT applications, we’ve done the same thing here. We have built form-fit blockchain applications that work on top of that,” he added.
The apps will make getting started with blockchain much easier for a business, but there are still significant challenges for them to overcome in taking the technology beyond proof-of-concept; chiefly, all the other businesses they work with.
As Gartner supply chain technology research director Amber Salley explained: “The apps will be as useful as there is an ecosystem committed to using blockchain.”
Consortium challenges
Alpha Acid is one of a number of early-adopters to get early access to the applications. Others named include Arab Jordan Investment Bank, CargoSmart, Certified Origins, Indian Oil, Intelipost, MTO, Neurosoft, Nigeria Customs, Sofbang, Solar Site Design and TradeFin.
CargoSmart is a shipment management software solutions provider in APAC, and begun its blockchain initiative for shipment documentation in July.
Since shipping document handling processes are complex, feature dated paper processes and involve many stakeholders across numerous countries, it is an ideal use case for blockchain CargoSmart CEO Steve Siu told Computerworld.
“We consider blockchain as the digital baseline for the next generation,” Siu said.
“Blockchain is something different – which is to come together to share that information in the first place then think about how the industry would take advantage of that to change the processes, to change the way they work together,” he added.
Getting all the stakeholders on to the blockchain will be a considerable challenge however.
Shipping companies have diverse technical capabilities and data standards, and currently exchange documents in many formats including email, online forms, and electronic data interchange (EDI). On average, a single shipment can involve more than 30 documents exchanged by all parties, often with multiple revisions due to human errors, before it leaves port.
These existing processes are not standardised, despite numerous attempts to do so, but would need to be if blockchain is to be used.
“To drive the industry to change is actually very difficult. That’s why we took this consortium approach, to get the industry together,” Siu added.
The sentiment was echoed by Certified Origin CIO Andrea Biagianti. His company has been using a blockchain application to trace key steps in the supply chain from Italian olive groves to the Bellucci-brand bottled extra virgin olive oil sold in North America.
“We think that the hardest step at the beginning is to build a best practice for all the actors in the supply chain. It is difficult for them to know that they have to work all together with one final scope,” he told Computerworld.
Committed ecosystem?
The requirement to get multiple stakeholders behind a single blockchain solution, could be a limiting factor in the apps’ success, Gartner’s Salley explained.
“Since it is a chain there needs to be multiple parties involved to add ‘links’ to the change. That means that the multiple parties will need to have invested in the systems and processes to make it work,” she said.
Despite the distributed, multi-stakeholder nature of the technology, Oracle will charge just one party, the “top node”, for using the apps and the cost is not based on the number of users on the chain.
“We do not intend on charging based on users, but we intend on charging for the platform itself,” Oracle’s executive vice president, applications product development, Steve Miranda told media.
“And the platform – think of it as the hub – whether that hub is purchased by a single node in the supply chain, the top node, or if that gets purchased by the collective sets of nodes… but because of the nature of the application and the distributed nature of the application, charging on a per user basis like that is counter to the way we expect it to be used. We want it to be used more pervasively not less pervasively,” he said.
Above a certain scale however, Miranda indicated that additional costs could kick in.
“The scale will likely have some sort of transaction charge on top of that but that depends on the blockchain use case,” he explained.
The apps will be interoperable with other blockchain providers with HyperLedger based solutions such as SAP and IBM, Oracle said.
Gartner research into supply-chain-focused blockchain solutions has found the market to be “uncertain, confusing and overly hyped”, while many proposed use cases “may not even need blockchain in the first place”.
A September report from the analyst firm said that a lack of data and governance standards across broad ecosystems of trading partners “will inhibit multi-enterprise collaboration, therefore stalling pilots and diminishing wide adoption”.
Until 2021, 90 per cent of supply chain blockchain initiatives will be proof-of-concepts (such as Commonwealth Bank of Australia’s recent almond shipping experiment) and onboarding challenges will halt 90 per cent of the initiatives across medium to large-scale enterprises, Gartner predicts.
“Blockchain in supply chain is a technology looking for a use case. I think the apps are Oracle’s attempt to create that use case. It is hard to sell blockchain as a platform so by productising it as an app gives a business a starting point to get using blockchain,” Salley said.
Intelligent Track and Trace will be available in the first quarter of next year, with the other apps following through the rest of 2019.
Source : https://www.computerworld.com.au/article/648812/oracle-apps-make-blockchain-easier-consortium-challenges-remain/
Chris McCann – Blockchain don’t scale (yet), aren’t really decentralized, distribute wealth poorly, lack killer apps, and run on a controlled Internet
Naval Ravikant recently shared this thought:
“The dirty secrets of blockchains: they don’t scale (yet), aren’t really decentralized, distribute wealth poorly, lack killer apps, and run on a controlled Internet.”
https://twitter.com/naval/status/983016288195829770
In this post, I want to dive into his fourth observation that blockchains “lack killer apps” and understand just how far away we are to real applications (not tokens, not store of value, etc.) being built on top of blockchains.
Thanks to Dappradar, I was able to analyze the top decentralized applications (DApps) built on top of Ethereum, the largest decentralized application platform. My research is focused on live public DApp’s which are deployed and usable today. This does not include any future or potential applications not deployed yet.
If you look at a broad overview of the 312 DApps created, the main broad categories are:
I. Decentralized Exchanges
II. Games (Largely collectible type games, excluding casino/games of chance)
III. Casino Applications
IV. Other (we’ll revisit this category later)
On closer examination, it becomes clear only a few individual DApps make up the majority of transactions within their respective category:
Diving into the “Other” category, the largest individual DApps in this category are primarily pyramid schemes: PoWH 3D, PoWM, PoWL, LockedIn, etc. (*Please exercise caution, all of these projects are actual pyramid schemes.)
These top DApps are all still very small relative to traditional consumer web and mobile applications.
Compared to:
Further trends emerge on closer inspection of the transactions of DApps tracked here:
- More than half of all DApps have zero transactions in the last week.
- Of the DApps with any usage, the majority of usage is skewed to a small few (see graph).
- Only 25% of DApps have more than 100 transactions in a week.
Takeaways
Where we are and what it means for protocols and the ecosystem:
After looking through the data, my personal takeaways are:
- We are orders of magnitudes away from consumer adoption of DApps. No killer app (outside of tokens and trading) have been created yet. Any seemingly “large” DApp (ex. IDEX, CryptoKitties, etc) has low usage overall.
- All of the top DApps are still very much about speculation of value. Decentralized exchanges, casino games, pyramid schemes, and even the current collectible games (I would argue) are all around speculation.
- What applications (aside from value transfer and speculation) really take advantage of the true unique properties of a blockchain (censorship resistance, immutability of data, etc) and unlock real adoption?
- For new protocol developers, instead of trying to convince existing DApp developers to build on your new platform — think hard about what DApps actually make sense on your protocol and how to help them have a chance at real adoption.
- We as an ecosystem need to build better tools and infrastructure for more widespread adoption of DApps. Metamask is an awesome tool, but it is still a difficult onboarding step for most normal users. Toshi, Status, and Cipherare all steps in the right direction and I’m really looking forward to the creation of other tools to simplify the user onboarding experience and improve general UI/UX for normal users.
What kind of DApps do you think we as a community should be building? Would love to hear your takeaways and thoughts about the state of DApps, feel free to comment below or tweet @mccannatron.
Also, if there are any DApps or UI/UX tools I should be paying attention to, let me know — I would love to check them out.
Playbook App – 67 Blockchain Articles & Whitepapers that Shaped Crypto into What it is Today
With all of the noise surrounding bitcoin and its underlying technology, blockchain, it’s often difficult to separate real blockchain articles from those just looking for clicks.
Here’s a list, in no particular order, of articles and whitepapers written by the people actively involved in developing this new technology. The resources below range all the way back from the 1980s to today.
Articles
- Fat Protocols by Joel Monegro, Union Square Ventures
- Bitcoin — The Internet of Money by Naval Ravikant
- The Bitcoin Model for Crowdfunding by Naval Ravikant
- The Fifth Protocol by Naval Ravikant
- A Beginner’s Guide to Blockchain Technology by Coindesk
- The Blockchain Problem Space by Dax Ravi, Ironbay
- Blockchain and Design by Blake Hudelson
- A Quick Reminder Why Bitcoin was Invented in the First Place by Playbook App
- Making Money — Bitcoin Explained (with Emoji) by Tess Rinearson, Chain
- Bitcoin, Ethereum, Blockchain, Tokens, ICOs: Why should anyone care? by Preethi Kasireddy
- Crypto Tokens: A Breakthrough in Open Network Design by Chris Dixon
- Minimum Viable Block Chain by Ilya Grigorik
- Introduction to Bitcoin Concepts by 21
- Why Bitcoin Matters by Marc Andreessen
- Bit gold by Nick Szabo
- What is bitcoin and the blockchain? by Brian Forde
- Blockchain, simplified by Alexey Malanov
- Bitcoin in comic by Shi Yan
- The Importance of Bitcoin Not Being Money by Erik Voorhees
- The Role of Bitcoin as Money by Erik Voorhees
- Blythe Masters Tells Banks the Blockchain Changes Everything by Edward Robinson
- The Crypto Anarchist Manifesto by Timothy C. May
- The God Protocols by Nick Szabo
- A Cyberpunk’s Manifesto by Eric Hughes
- How the Bitcoin protocol actually works by Michael Nielsen
- Why the blockchain matters by Reid Hoffman
- Bitcoin faces a crossroads, needs an effective decision-making process by Arvind Narayanan
- Encrypted Data For Efficient Markets by Numerai
- Thoughts on Tokens by 21
- Three Technical Requirements to Connect Blockchains Without a Token by TenX
- Why I like the term, “Cryptoassets” by cburniske
- The Crypto J-Curve by cburniske
- Quantifying Decentralization by Balaji S. Srinivasan
- Beyond the boring blockchain bubble by Jon Evans
- Blockchains from the ground up: Part 1 by John Matthews
- On Bitcoin and Red Balloons by Moshe Babaioff
- A Proof of Stake Design Philosophy by Vitalik Buterin
White Papers & PDFs
- Blockchain in the Mainstream by Jeremy Epstein, Never Stop Marketing
- Denationalisation of Money: The Argument Refined by F. A. Hayek
- RPOW — Reusable Proofs of Work by Hal Finney
- B-Money by W. Dai
- Bitcoin Whitepaper by Satoshi Nakamoto
- Some Simple Economics of the Blockchain by Christian Catalini, MIT Sloan
- Hashcash — A Denial of Service Counter-Measure by Adam Back
- Shelling Out: The Origins of Money by Nick Szabo
- Bitcoin and The Age of Bespoke Silicon by Michael Bedford Taylor
- Majority is not Enough: Bitcoin Mining is Vulnerable by Ittay Eyal, Cornell
- On Bitcoin as a public randomness source by Joseph Bonneau
- Research Perspectives and Challenges for Bitcoin and Cryptocurrencies by Joseph Bonneau
- Eclipse Attacks on Bitcoin’s Peer-to-Peer Network by Ethan Heilman
- Does Governance Have a Role in Pricing? Cross-Country Evidence from Bitcoin Markets by Robert Viglione
- Bitcoin in Islamic Banking and Finance by Charles W. Evans
- Bitcoin-NG: A Scalable Blockchain Protocol by Ittay Eyal
- The Bitcoin Backbone Protocol: Analysis and Applications by Juan A. Garay
- The Bitcoin Lightning Network: Scalable Off-Chain Instant Payments by Joseph Poon
- Essays on Bitcoin by Alex Kroeger
- Blockchain Technology by Michael Crosby, Google
- Blockchain: the solution for transparency in product supply chains by Provenance
- Blockstack: A Global Naming and Storage System: Secured by Blockchainsby Muneeb Ali
- Consensus: Immutable Agreement for the Internet of Value by Sigrid Seibold
- Distributed Ledger Technology: beyond block chain by UK Government Chief Scientific Advisor
- Economics of Bitcoin: is Bitcoin an alternative to fiat currencies and gold?by Peter Surda
- Extending Existing Blockchains with Virtualchain by Jude Nelson
- The Impact and Potential of Blockchain on the Securities Transaction Lifecycle by Michael Mainelli
- A Fistful of Bitcoins: Characterizing Payments Among Men with No Namesby Sarah Meiklejohn
- An architecture for the Internet of Money by Meher Roy
- MRA Bitcoin Primer by Phillip Rapoport
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