26 Jul 2019  (287 Views)
Block chain technology will be another disappointment

Five years ago, my friend was excited about blockchain technology. He explained the concept of this technology and
how the use of  open ledger system, mining and consensus algorithm will allow systems to be developed that are hacker proof and does not need to rely on a trusted intermediary.

I listened to his explanation and asked him several questions. I felt that it was a complicated way to deal with the challenge of being "hacker proof". I said - it will not work.

Later, I met another friend. He was excited about ICO - initial coin offering, based on cyptocurrency technology and blockchain. He was involved in a startup to develop this cyptocurrency. I told him that I was not interested to invest in the startup.

Later, I heard that many banks and financial institutions are using blockchain to develop smart contracts. Even the regulatory authorities were supportive of these moves. I remained unconvinced about blockchain. I think it is a solution looking for a problem. 

I am interested to hear about practical and successful adoption of blockchain technology and smart contracts. There were a small number of use cases that claimed to be successful and to bring down the processing costs. I remained skeptical.

Recently, I met my friend who first introduced the blockchain concept to me. He agreed with my assessment that the technology was not really practical. He said that the community had now moved to blockchain 2.0 to overcome the inherent weakness in the initial version. 

I read an article that did research on the high profile and expensive blockchain projects that were announced in recent years.  It seemed that most of these projects were abandoned or delayed. There were no major announcement of success. A lot of money had probably been spent. 

Blockchain is supposed to be "hacker proof". It did not stop the fraudulent practices. There were a few reported cases of fraudulent transactions being processed in cyptocurrency exchanges. They led to losses by the customers. Far from being "hacker proof", the blockchain technology, which is expensive and complicated to handle, did not really solve the underlying problem of fraud.

I remain skeptical. I do not just blindly get excited about blockchain because other people are. I do not get excited about it even if the government or regulatory authority declare it to be a useful technology. I still rely on my common sense. It does not smell right. 

In case someone thinks that my skepticism is borne out of ignorance, I must tell them that I have enrolled for an online course to learn about blockchain. The information presented in the course is similar to what my friend had told me. It did not offer any new insight.

I could still be wrong. However, my skepticism seemed to be proven right, up to now. 

Tan Kin Lian 

Vote - do you agree with my skepticism?

Agree: 4  Disagree: 0  Vote