The Hype AND The Criticisms
It has been 11 years since the world has been exposed to the concepts of blockchain technology. During this time, there has been no shortage of both hype and criticism for emerging blockchain applications. It is the position of Building Blocks Technologies that, as with many things in life and technology, the truth lies somewhere in the middle! For those who may be unfamiliar, below are some positions from both sides of the fence.
-- The BlockChain will replace all intermediaries: banks, government agencies (DMV, for example), courts, insurance companies and the like.
-- The BlockChain will "level the playing field". As all members of society become equally entitled to hold and exchange value, global inequities, such as those experienced by the unbanked, will cease to exist.
-- The BlockChain will usher in the era of Web 3.0; In this era users will no longer tolerate big companies such as FaceBook and Amazon to hold and profit from their personal data. Individuals will own and control all of their own data and will have sole decision making authority as to how and when their data gets distributed.
-- "VC money is pouring into numerous blockchain startups. IBM is betting the farm on the technology. Pundits around the globe are calling for blockchain to reinvent everything from equities trading to charitable giving." (Forbes)
-- "By 2025, the business value added by blockchain will grow to slightly more than $176 billion, then surge to exceed $3.1 trillion by 2030". (Gartner)
-- "The global blockchain technology market size is expected to reach USD 57,641.3 million by 2025, registering a CAGR of 69.4% from 2019 to 2025". (Grand View Research, Inc.)
-- "Blockchain Cross-Border transactions to Reach over 1.3 Billion by 2023, up from 119 million in 2019". "The value of transactions recorded on the blockchain will thus reach an unprecedented $3.4 trillion". (Juniper Research)
-- " “Blockchain is maturing rapidly, and we have reached an inflection point where implementations are moving quickly beyond the pilot and proof of concept phase.” (International Data Corporation)
-- It is currently 2020. Where is blockchain technology, REALLY?
The bitcoin blockchain remains at the top of the heap, doing what it does very well -- a secure store of value that can be transferred peer to peer. Having said that, the BTC Transaction value per day is < 2 B and Ethereum, the 2nd largest and most active blockchain, transacts at a scale < 1 B per day. This accounts for just a micro-fraction of the activity of the overall global economy.
Ethereum is the most active and popular blockchain for hosting applications (DApps). Even so, there are less than 7K users of DApps (total!) per day. Compare this to just one WebApp marketplace, Etsy, for example. This mid-range, by popularity marketplace has 270K users per day.
Decentralized Finance (DeFi) is the hottest industry on Ethereum (currently). DeFi applications suffered 4 serious "hacks" in the first 2 quarters of 2020, resulting in billions of dollars lost and leaving some in the industry to declare that Ethereum should not be a platform for financial applications.
There are currently less than 10K blockchain developers total in the world. Of these, there are less than 200 developing at the protocol level. Compare this to the number of technologists/developers just in the Bay area during the dot com era, which was ~700K.
"Behind the Veil of Decentralization" -- This is a VERY worthwhile read. It gives a nice summary of the hyped utopia in the first paragraph and then provides an insightful discussion of the blockchain disposition.
-- "...Blockchain is the most over-hyped technology ever, no better than a spreadsheet/database". (Nouriel Roubini)
-- "Blockchain is not only crappy technology but a bad vision for the future....no matter how much blockchain improves it is still headed in the wrong direction." (Kai Stinchcombe)
-- BlockChain is a solution looking for a problem. It's a community building a castle in the middle of the desert.
-- BlockChain technology is too complex for mainstream adoption or long term success.
-- BlockChain contracts aren't smart and aren't contracts (D. Black, published in Forbes)
-- DApps: A video that is a little dated, but definitely a fair and funny take on Decentralized Applications.