As my team and my readers know I am very reluctant to even discuss, much less put any effort towards, what I believe is “Hyped Emerging Technology” . It is my view that blockchain is a niche technology, not a disruptive technology as it is often touted. To be a disruptive technology it must transform the current business model with lower cost and productivity gains which result in a high adoption rate. The continued focus on blockchain technology in the public sector is counterproductive when thrown out by technology leaders who should be focused on implementing proven change that benefits both internal and external customers. I take the approach that taxpayers dollars should not be utilized for adoption of the latest technology without first building a solid business case and then researching the technology which includes a mandatory proof of concept to ensure a high confidence level of successful implementation on time and on budget. I caution against the unrelenting chase (regularly talk without action) for innovation, to be first to implement is not a goal and more often a waste of resources and taxpayer funds.
I prefer to put our technology efforts where it can benefit the greatest number of people at the lowest cost, not a niche player such as blockchain that only appears to do one thing very well which is establishing/validating the order of entries. Eliminate its potential future adoption in the field of cryptocurrency, I have not been able to find any extensive value proposition. Blockchain has a long way to go before reaching mass adoption. It is certainly overhyped when referring to its success rate in relation to customer improvements and advances. I explained in some detail what I believe is the issue with investigating niche technologies in my blog “Technology without a Business Case”. It diverts us from the basic issues we need to solve for our State, it wastes tax payer dollars and it puts strain on the already limited resources which are available. I want to focus my efforts on mainstream technologies that deliver immediate value to customers.
Blockchains fundamental premise which is the lack of a central point of control results in extended transaction times. Single transactions taking minutes are simply not cost competitive nor scalable when compared to credit card transaction times as high as 24,000 transactions per second. Blockchain technology will one day produce cost effective benefits and greater adoption rates once the speed of transaction improves, but as the most recent Gartner “Hype Cycle for Blockchain 2021” shows it has not hit the “Plateau of Productivity” with real-world benefits. Certainly looking at the near future, it is not there yet.
According to Deloitte, U.S. Companies are more inclined to view blockchain as “overhyped” then other countries. Yet many of my colleagues are still in pursuit of a problem for the Blockchain solution. I hear the same justification qualified by the need for “trusted transactions”. They seem to focus on Private Blockchain technology which includes a restricted list of individuals authorized to make append-only data structure changes. This flavor of Blockchain doesn’t remove the need to trust humans, these authorized individuals are still in control which falls short of the trust goal they claim it provides. A Private Blockchain only removes the chance of manipulating audit data which the same level of security could be achieved cheaper and faster using existing private leger technologies.
Most blockchain projects don’t make it past a press release, an inventory by Bloomberg showed. There is much more talk about the technology than examples of usefulness. Blockchain has struggled to be relevant for at least the past 10 years with a countless trail of failed projects and wasted dollars. My standard reply is that in Public sector, it is fine to be second. This is an area where patience is a necessity until the technology reaches the “plateau of productivity” which is still several years away. We have no motivation to beat our competition to the market to increase our customer footprint. No budget or educational grants are provided to perform R&D . I left the search for disruption of the market technologies behind more than 6 years ago when I joined the State.
In an earlier blog Urgency to Fail I discussed the constant search for the elusive “easy button” to solve our immediate problems but in this case we can’t even define the problem to solve. The cult like following to a technology that has a less than stellar history of success is a mystifying study in human nature.
As always, I appreciate what you do every day for the State of Nebraska.