Whither Blockchain?


Article from Issue 212/2018

Is blockchain finally getting interesting? I guess it always has attracted some attention – if not as an investment at least as a generator of headlines.

Dear Reader,

Is blockchain finally getting interesting? I guess it always has attracted some attention – if not as an investment at least as a generator of headlines. Who could forget the Mount Gox bankruptcy [1] or Newsweek's unfortunate "unmasking" of a Bitcoin creator who turned out to be the wrong guy [2].

The value of a Bitcoin has compounded generously in recent years, and the people who got in early got lots of money (unless they lost track of their key [3]). The volatility is certainly insane; the cryptocurrency hit an all time high in December 2017, then lost two thirds of its value in two months, and then sprang back to about half of what it was in December. I'm not an economist, but it seems to me that when the price of anything jumps around that much, buying into it is a game of chance. One invests in Bitcoin the way one might "invest" in a lottery ticket.

Some of the shine is even off Bitcoin mining right now. The cottage industry that has developed around the task of finding Bitcoins using high-performance parallel computers is consuming insane amounts of energy, thus giving the once-innocuous digital currency an unexpectedly negative reputation with environmentalists [4].

But blockchain is more than just Bitcoin. Other recent developments are starting to reveal the real power behind this fast-evolving tech. Some leading jewelry companies, for instance, recently announced they would be using a blockchain-based ledger called Tracr to track and verify the authenticity of diamonds. Tracr is built on the IBM Blockchain platform, which is intended to let companies and industry groups build their own solutions around blockchain technology. The Hyperledger project, which is sponsored by the Linux Foundation, is building a similar collection of blockchain development tools that have found their way into a number of different initiatives, including the Greenstream project, which describes itself as "a blockchain disruptor focused on increasing efficiency and record keeping in the emerging Canadian legal cannabis industry."

Microsoft is developing the Coco framework as a platform for building blockchain solutions, and Amazon, Oracle, and other vendors are working on similar products. This new class of blockchain developer tools will let vendors and enterprise companies build their own applications to secure the supply chain and verify the authenticity of transactions. In the long run, watching the fortunes of this new breed of developer tools will tell you more about the direction of blockchain than following the wild fluctuations in the value of Bitcoin.

Joe Casad, Editor in Chief

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