Blockchain Technology has attracted attention as the basis of cryptocurrencies such as Bitcoin, but its capabilities extend far beyond that, enabling existing technology applications to be vastly improved and new applications never previously practical to be deployed.
Also known as distributed ledger technology, blockchain is expected to revolutionize industry and commerce and drive economic change on a global scale because it is immutable, transparent, and redefines trust, enabling secure, fast, trustworthy, and transparent solutions that can be public or private. It could empower people in developing countries with recognized identity, asset ownership, and financial inclusion; and it could avert a repeat of the 2008 financial crisis, support effective healthcare programs, improve supply chains and, perhaps, clean up unethical behavior in high-value businesses such as diamond trading.
The following letter was published in the Letters to the Editor in the February 2017 CACM (http://cacm.acm.org/magazines/2017/2/212426).
Sarah Underwood's news article "Blockchain Beyond Bitcoin" (Nov. 2016) was yet another disappointing read on blockchain, offering an (incomplete) summary of publicly available information on the technology and its proposed application areas. Many claims, including the key one that "Blockchain technology has the potential to revolutionize applications and redefine the digital economy," were neither discussed nor backed up with evidence. From a scientific point of view, this is insufficient. Worse, like many blockchain proponents, Underwood failed, in my opinion, to raise the right questions. Instead of focusing on "what block-chain could do," one should address "what blockchain can do better than other technologies."
In this context, blockchain is often compared to existing solutions rather than to existing technologies, as in the proverbial comparison of apples and oranges. There may be any number of reasons, including operational, economic, or social, why an existing solution (as inadequate as it may be) has not been replaced in the marketplace. However, this does not mean per se there is no existing, better-understood technology than blockchain available to address a given problem.
Moreover, blockchain is often credited with the ability to solve tough long-standing problems. For example, Underwood mentioned "digital identity." Various attempts to address this challenge, including well-established approaches (such as Public Key Infrastructure and Web of Trust) fail in various ways due to nontechnical aspects of human relationships, including trust, social, cognitive, economic, and even physical. So far, moreover, no evidence has been produced that shows how blockchain outperforms existing technologies in addressing the problem of digital identity.
It is time to ask the right questions about blockchain if we want to understand its actual properties, strengths, and weaknesses, as well as its promise.
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