Blockchain is Dead. Long live the Blockchain!

Originally posted 20th Jan 2016 via LinkedIn:

A few conversations I’ve had with people about blockchain recently have gone like this…

 “So, what’s Blockhain?”
Me: “It’s the technology that underpins Bitcoin”
“So, it’s all about money transfers, cryptocurrency and dark web then?”
Me: “No, no, it’s about the transfer of value, a way of tracking & transferring ownership of assets, enabling management of identity, providing KYC, AML and lots of other stuff”
“But didn’t I just see that the technology behind Bitcoin doesn’t actually work?”
Me:”Errrrr…..”


The death of Bitcoin & Blockchain ?

The week started with news that Bitcoin was being pronounced as dying (hence the comments above) by Mike Hearn, one of the originators of Bitcoin.  He wrote a blog post titled The resolution of the bitcoin experiment.  In a nutshell, he said that Bitcoin was an experiment and, like many other experiments, it had now failed.

The New York Times produced on 14 Jan 2016 quite a nice analysis, A Bitcoin Believer’s Crisis of Faith, which is worth reading to better understanding the issues from a slightly less (and unbiased) perspective.

So, whilst Bitcoin may die, does this infer the end for Blockchain?  I’d suggest not for four reasons:

 1 - World Economic Forum

Has produced several insightful article into bitcoin and blockchain, such as on 3rd Nov, How will blockchain technology transform financial services? And on 19 Jan 2016, The 7 technologies changing your world.  Further evidence of mainstream thinking came when on 17th Jan 2016, Lloyd’s of London CEO Inga Beale namechecked blockchain as part of her presentation on How to survive and thrive in the fintech revolution.

The coverage that the influential WEF is providing on the technology means that it will continue to gain visibility and traction.

2 - Government perspectives

On 19 Jan 2016, UK Government published the Blackett review on Distributed ledger technology and an associated video to explain blockchain and its possible use.

When the UK Government has grasped that something is of such importance that they commission reports to see how they can align with it in order to make “UK Plc” more attractive globally then it’s no bad thing and will help ensure the continued adoption of new technologies.

3 - Investments in Blockchain

There is a lot of investment being ploughed into R&D and startups currently and its increasingly challenging to keep pace with just how much money the technology is consuming.  Such is the pace of development that I found it quite amusing the Computer Weekly announced on 4th November that Finance Industry will invest more than $1 Billion in blockchain in the next two years.  This is amusing because just four days later, on 8th Nov, Coindesk reported that $1 Billion had in fact been invested in Bitcoin & Blockchain infrastructure

Angelist is now tracking 188 Blockchain Startups (with an  average valuation of $4.5 Million) and VC’s are clearly putting a lot of cash in top support the sector – as an example, Boost announced in 2015 that its total investment in Blockchain startups has exceeded $50 Million.

ChainHQ produced a block infographic highlighting the most funded companies in their analysis of investments totaling almost $1 Biliion.  This was pretty impressive until Cognizant’s Ian West published an infographic on the 2016 Blockchain Ecosystem that highlighted investments to date of $921 Million.

With this much money directed at a technology space, something must come out of it!

 4 - From Use Case to Case Study?

There’s increasing evidence that 2016 will be the year in which projects will move from concept/discovery/Proof of Concept and Forbes had a great headline on 12 Jan 2016 that Blockchains poised to be the Hot Tech for moving money in 2016.

Perhaps Mike Hearn will be proved right and the particular protocol upon which Bitcoin’s Blockchain is based could fail.  However there are so many other versions – public, private, permissioned, permissionless, etc. that it’s important to remember that Distributed Ledgers use Blockchains and not just “the” Blockchain.

CTO’s – What is your Blockchain Strategy?

I suspect you will fall into one of three groups when considering this question:

Trailblazers – and, let’s face it, it’s pretty unlikely you’ll be in this group!

Statements made by this group would be along the lines of:

• We were an early adopter and decided that we’d create a hybrid using a fork from Ethereum
• We have an innovation lab and we’re trialling various Proof of Concepts to identify an ideal Use Case.  We need to figure out the most appropriate protocol and then iterate through prototyping before deploying a baseline platform.

Monitors – Of whom there’s a growing membership of organisations who’re thinking that they should be thinking about it.  More.  Probably.

This group’s members are likely to be saying:

• We believe that the technology is at an early stage and we’re keeping a watching brief
• It sounds jolly interesting and we can see how it’s moving rapidly in other sectors such as banking, we just haven’t figured out a suitable Use Case
• We’re waiting until it matures and is adopted by our peers or becomes a market standard
• We know it’s going to become important and we’re spending some time researching it

Majority – Most organisations, at the end of 2015, are probably in this group

Really easy to spot because you’ll hear then say things like:

• Blocked What ?
• Isn’t that the same as Bitcoin?  I don’t see the point of it!
• Errrr, I’ll check with my CTO.  Can I get back to you?
• Or even……Forget Blockchain, what’s a CTO? 

So, why should you care about Blockchain, let alone having a strategy?

Well, that’s a much easier question to answer…….and the answer is……hype.

Technology (or rather technology marketing)  is really good with hype.  There’s a whole industry of vested interest behind a hype band wagon.  Driven by hardware and software manufacturers, closely pursued by consultancies, advisors, specialists, etc.  All of whom are keen to show you that they have a solution to a problem that you didn’t even know you had.  The Information Technology industry is so good at hype that Gartner, a well known industry analyst, even publishes an annual hype-cycle report. 

The problem with hype is that it results in technology innovations being promoted before organisations are fully aware of their capabilities.  Past examples of hype have resulted in questions around what an organisation’s strategy was for Data Warehousing, Cloud, Big Data, Mobile enablement, Virtualization and Digital.  Quite often the question was raised by someone who was willing to “help you on your journey” by providing consultancy and training.

Where is Blockchain on the hype cycle?

Interestingly Blockchain didn’t even appear on the emerging technology 2014 report although crypto-currency did.  Nonetheless the amount of articles, blogs, reports, posts, etc. that are beginning to appear, shows that the hype is building.  Earlier this year Gartner published the “Hype Cycle for the Programmable Economy”  although this is currently available only to subscribers.

When Goldman Sachs issues a report to say that Blockchain is ready to “take centre stage” then you know that a seismic shift is underway.  I predict that there’ll be increasing coverage by analysts wanting to be seen as visionary thinkers and we’re going to see increasing mainstream media coverage.  Before you know it, the back page of The Economist, in-flight magazines and pull-out advertorial supplements in the business press will feature adverts from big consultancies offering to help you define, design, deliver and deploy Blockchain in your organisation.  That’s when your company execs will begin to think…..H’mmm, see a lot of publicity around Blockchain, must ask my tech team about this…….So, be prepared.

Blockchain in Insurance - and why it's not about blocked drains

So, how are blocked drains going to disrupt the insurance market ?


This is a question I was asked recently in a lift (for US readers, elevator!) that was descending on the outside of the iconic Lloyd’s of London building on Lime Street.  I pondered the question whilst enjoying the novel view of The City afforded from a building which defies architectural norms and gives the appearance of being built “inside out”.


When completed in 1986 the Richard Roger’s design was considered futuristic by placing service equipment, such as ducting and lifts, on the outside of the building, thereby better using the internal space.  At the time this unique approach was considered as ground-breaking and innovative.

As a building it would probably baffle those who established the original insurance market in London in 17th Century.  In some ways however whilst the building was considered advanced in 20th Century, now we're in the 21st Century the market itself has retained an aspect unchanged from its 17th Century origins - that of providing a physical marketplace. 


When one considers other financial markets that have transitioned to a virtual world through the adoption of trading technology - London Stock Exchange, NYSE, etc. the London Insurance Market is now almost unique in conducting business face-to-face.  Perhaps it’s by virtue of location ? The London Metals Exchange Price Discovery Ring, located within a few hundred metres of the Lloyd’s building stands out as about the only other remaining physical trading platform and that’s only for price discovery, the majority of trading now conducted via its electronic platform.


So, what could be about to disrupt a market that has robustly survived several centuries?  And what does it have to do with blocked drains?


The answer is, of course, not about blocked drains, or block trains (which someone else mentioned).  What the question was really about was “How is blockchain going to disrupt insurance?”.  Such is the general lack of awareness in the insurance sector of a technology that is currently infiltrating the banking, payments and currency exchange world, that many insurance practitioners are simply unfamiliar with the term.


Awareness of blockchain in the insurance sector is however changing.  Rapidly.  There are an increasing number of blogs, Linkedin posts, Instech groups, Fintech startups, accelerator programmes and innovators who’re all helping to build awareness of what (according to futurologists) could be as disruptive and revolutionary as the Internet was.

For some further insight around the market, the potential and the growing buzz, take a look at the blog written by Paolo Cuomo.  Additionally, it’s worth considering other technology advances, as described in Robin Merttens blog about Instech, and thinking how these could align with blockchain to be doubly disruptive.  We live in interesting times and, thanks to technology innovation, the times are becoming more interesting more quickly!