The missing link in the blockchain
The tagline on my website? “Tech isn’t your problem. It’s your business.” Another way to put it: don’t think about the technology first. The first step is figuring out the business problem you’re looking to solve. Then you can start looking at solutions, which might include technology. It’s always a bad idea to start building the tech before you figure out the business.
This thought comes up often for me and came up again as I was reading an article this week, forwarded by a loyal reader and friend, by Tim Bray: AWS and Blockchain.
As a former high-level technology leader at Amazon, Tim had very little that was positive to say about blockchain’s future. (I highly recommend you read the whole thing – I found myself nodding in agreement almost the entire time.)
Bitcoin itself can rot in hell and I hope it implodes tomorrow. But the Eth folk managed to get proof-of-stake to work at scale; good on ’em. Still, the explosions of non-Btc crypto Ponzi schemes continue, in a boring and discouraging rhythm.
I’m not prepared to say that no blockchain-based system will ever be useful for anything. But I’m gonna stay negative until I see one actually at work doing something useful, without number-go-up greedheads clamped on its teats.
And I’m glad AWS didn’t make a big bet on it back then.
Tim wrote this piece in the wake of the Australian Stock Exchange’s canceling of a long-running effort to build a blockchain-based trading system. Tim was prompted by that, but he might have also noticed this month that big players like Maersk and IBM are giving up on solving the shipping industry’s complex paper trail with blockchain.
I wrote about a year ago (long before many people had ever heard of FTX) about how the honeymoon is over for cryptocurrency.
Some years ago, I proposed a concept for yet another social network, which would allow you to track and verify the origin of news. Here, Tim’s core criticism would apply. “Could it be done without blockchain?” Of course. But I think that the blockchain (let's call it an extension of current technologies) would make things easier. Social media is just one example among many. To take a completely different example, by tying VIN numbers from cars as they’re manufactured into the blockchain, you could remove a lot of uncertainty and inefficiency from car sales, repairs, recalls, etc. There are many more examples.
So, instead of a technology in search of a problem, it’s something we can see clearly has value as a solution. But the issue for blockchain, as for many technologies, is one of timing.
If you’re too slow, other companies can get a first-mover advantage as they become incumbents and dominate. But being too early, you can waste a lot of money in R&D and in building up product awareness, trying to get those first essential clients. An actor who comes in later, after you’ve spent yourself building up a new product category, can steal your thunder.
With blockchain, it seems like we’re in a “too early” situation, not “too late.” Eventually, I expect this technology to show something more than promise. But for now, it’s an example of a recurrent pattern we see across all kinds of companies: timing is everything.