Blockchain: beyond cryptocurrencies

Blockchain definitely polarizes - some still are convinced that this is just an ephemeral phenomenon, others see it as the holy grail for new businesses and even societies.

This short comment will not cover Cryptocurrencies and other similar financial applications for which Blockchain was initially developed and is mainly used today. It is more about the conceptualization of a decentralized network for authentication: this seems indeed to be the compelling, essential and revolutionary (beware: drama!) link between the physical and digital world! Before having a quick look on promising and innovating blockchain use cases, it is useful to remind the main limitations of the current blockchain technology (very summarized):

a) highly energy-voracious (currently the entire Blockchain network consumes as much energy than Austria as a whole, according to Digiconomist),

b) high latency (takes 10min to a day to validate a new block),

c) low throughput (Transaction Per Second - only 7-25 TPS for current blockchains, even if sidechains as RSK go up to 1,000, still only 50% of Visa’s 2,000 TPS),

d) security issues, theoretically hackable (51% attack),

e) legal framework uncertain for public blockchains (keyword: responsibility),

f) governance issues (miners have to concentrate massively computing power and become paradoxically a threat).

These are the main, non-exhaustive critics regarding Blockchain's potential to unleash the digital economy, each of the limitations is a topic by itself.

What about some disruptive use cases? Take private blockchains and smart contracts- they already drive thousands of business models (TEPCO for energy certificate trading or IBM for SCM, for instance). Needless to say that in an era of Internet of Everything this is a key enabler.

To the same extent, but with a public blockchain, players like SlockIt could uberize Uber (sorry for the too obvious wordplay!) and AirBnB (real P2P alternative for home-sharing already in place). This is where we get really rid of the middlemen!

Furthermore, Blockchain can play an important role for digital identity and privacy - a first serious try comes from Blockpass, tokenizing your personal data and using blockchain for ID authentication. Could be an inspiration for the e-citizen or our future digital twins.

Last, but not least, all kind of property right management (say, Music or Video) can - and very probably will - rely on blockchain, but to become main-stream, above mentioned limitations have to be solved. Note that there exist already niche solutions like Livepeer or Peertracks.

In a nutshell why in my opinion Blockchain will have a bright future:

1) on the one hand the above-mentioned limitations seem circumventable in short-term,

2) on the other the characteristics of this infrastructure technology are so appealing: immutable, secure and reliable.

In a digitized world where trust is literally key, Blockchain is ripe enough to fulfill its fundamental role as trustworth network, perhaps even exceeding boundaries beyond business!