Blockchain: Distributed ledger technology still misunderstood
Blockchain may be the hottest technology trend in town, but business leaders run the risk of falling down a rabbit hole unless they are able to separate fact from fiction, according to Gartner’s research fellow Ray Valdes.
While industry buzz around the bitcoin blockchain plus a dozen other competitive technologies has grown to deafening proportions, Mr Valdes warns that a dangerous cocktail of wishful thinking, mythmaking and misunderstanding can confuse the long-term transformative potential of the technology.
“The thing about blockchain is that you will find businesses using the term in different ways in the same conversation,” Mr Valdes said.
Mr Valdes also warns that the rampant interest in the technology has spawned a brand new business of “blockchain washing” — where the supposed benefits of the technology in a number of sectors is used to peddle spurious or half-baked solutions.
According to Mr Valdes, who is in Sydney to speak on distributed ledger technology at the Gartner Applications Summit, the main problem is that many are hoping to use blockchain as a silver bullet without understanding the basics.
“Using blockchain to solve problems in healthcare, supply chain management and energy markets are all worthy initiatives, but we have to understand that this technology is still in its formative stage,” he told The Australian.
“It’s wishful thinking for magic middleware.
“We need to think of blockchain in the same way as we look at the world wide web, it’s a great foundation on top of which you build the applications.”
Mr Valdes added that the highly technical language associated with blockchain had led to some persistent myths.
“Years ago it was cloud computing, then you had social networks and now it’s bitcoin and blockchain,” he said.
Language plays a big role in the equation and Mr Valdes says it’s important to define what blockchain can do and what it can’t.
Blockchain can be classified specifically as the public ledger of all bitcoin transactions that have ever been executed. It’s also the fundamental technology that underpins a number of other outfits like Ethereum, Tendermint, Blockstream and Chain that have implemented their own distributed ledgers. So far that’s pretty much it and according to Mr Valdes, the rest of the conversation either revolves around the rebranding of older distributed database technology or the advanced solutions based on the technology.
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Source: Blockchain: Distributed ledger technology still misunderstood – The Australian