Blockchain: Beyond Hype and Toward Wider Use

Posted by on Feb 5, 2019

Over the past year, blockchain began coming into its own. It remains the foundation of digital currencies, but is now more widely diffused, independent and less subject to inflated expectations than it was at the start of 2018.

Many industries are now looking into the distributed ledger technologies once exclusively associated with cryptocurrency. In a lecture I heard last April sponsored by Virginia Commercial Finance on “The Business Case for Blockchain,” the list included the following: pharma/food/agribusiness, import/export, digital supply chain finance, insurance, alternative investment, and medical records/credit data/social media.

Last summer, I even had a few meetings about a related white paper for the decidedly non-sexy government procurement sector. Another indication of how far this technology had separated from Bitcoin mania.

Blockchain and the Cable Industry

In addition to those industries and sectors, the cable industry is also exploring the application of blockchain. At Cable-Tech Expo in October, three technical papers included the term in their titles, up from two in 2017. (I reviewed other papers and events from this conference here, here and here.) Brief summaries follow:

  • “Internet Scale Blockchain Architecture,” Michael Fay et al. Akamai Labs. The authors propose a tiered approach to use cases that need speed and scale. Latency is a common performance issue. (Bitcoin is known for slow block creation and transmission.) In the Akamai model, the edge tier handles incoming traffic, and the core tier executes transactions.
  • “The Emerging Impact and Use Cases of Blockchain Technology,” Sandeep Katiyar, Nokia Bell Labs Consulting. MSOs could find blockchain helpful in securing SDN, cloud storage, virtualization IoT and billing. For instance, it could overcome the weakness of SDN’s centralized point of control. For IoT, it is applicable to contracts, provisioning, management and end-user security.
  • “Solving All Our Problems… Sort Of…: Blockchain Integrity, Security and Reliability for Cable Use Cases,” by Steve Goeringer and Jason Rupe, CableLabs. The few use cases that could impact the cable industry involve new and direct revenue, cost optimization, customer experience and reduced ecosystem friction. Supporting them, however, requires addressing security and reliability concerns.

CES Book Club

A book on the topic also made it this year into Gary Shapiro’s CES Book Club: Blockchain – The Trust Technology, by Mark Mueller-Eberstein and Phil Klein. The authors see blockchain as an enabler of any transactional business process.

That “any” casts a wide net. How wide? In his recorded comments on the CTA Stage in January (see photo of the co-authors), Mueller-Eberstein noted that “twenty percent of the world’s population has access to identity and financial systems, and 80 percent have not.” Given the proliferation of smartphones, there is a tremendous potential for blockchain to engage billions of new participants.

Other real-world applications are moving fast. Mueller-Eberstein cited examples in eCommerce, banking, oil and international shipping. The Chinese government, through its Belt and Roads initiative “has invested heavily in blockchain technology over the last three years.” He also highlighted an initiative to use distributed ledger technologies for certifying that minerals, such as lithium, are mined under humane conditions.

Mainstream = Boring?

Blockchain’s march into the mainstream continues. As Mike Orcutt summarizes in the January 2019 MIT Review, this year Walmart expects to deploy blockchain as a food supply tracker, Wall Street plans to launch a digital asset exchange, and the components for implementing smart contracts are lining up.

Some nations are also backing digital currencies, which is an ironic shift, given cryptocurrency’s anarcho-capitalist roots. Orcutt’s prediction? “In 2019, [blockchain] will start to become mundane.”

The contrast with a year ago is striking. Then, the cryptocurrency/blockchain hysteria was peaking. Now blockchain is generating less noise, but more utility. It’s the well-worn, hype-cycle path popularized by Gartner. After the Peak of Inflated Expectations, eventually emerges the Plateau of Productivity.