Every relationship goes through a “honeymoon” phase—a bit of time, generally at the start of the relationship, where everything is perfect, dreamy, and mind-blowing. In technology terms, the public has been enjoying that phase with blockchain. Everywhere we turn, we hear about blockchain’s benefits—transparency, security, the ability to build “trustless” business networks for just about anything. Until now, blockchain has been the perfect virtual partner. But, as we’re starting to learn: every honeymoon has its end. And we in the tech industry are starting to notice blockchain’s limits.
First off: I want to emphasize every technology has its limits. No person is perfect, and no technology created by a person ever will be, either. But the following are just a few examples of blockchain’s limits—ones we’ll likely be working through in couple’s therapy for quite a while.
Blockchain’s Limits: Trust is Still a Sticking Point
As much as we all praise blockchain for its ability to keep a documented, un-editable record of the farm-to-fork journey of our organic produce or the production of our bespoke Italian suit, the fact remains blockchain itself isn’t fail safe. After all: every blockchain must start somewhere, and the data points it receives will be entered by—you guessed it—a human being. The following are just a few examples of the ways blockchain can be manipulated by human error or malice:
- A QA agent falsely verifies the quality of goods before they’re shipped overseas. In doing so, he initiates a false positive on the trust-o-meter—one blockchain is not able to detect.
- An art dealer falsely verifies a knock-off piece of art as the “real thing.” Because its been verified, every owner thereafter will purchase a knock-off thinking it’s real—likely, for a really large sum of money.
- An HR professional falsifies an employee’s review—someone who happens to be her husband. Moving forward, no one—including future employers—will know he was written up for drinking at work.
As you can see, blockchain is as trustworthy as the trusted individuals using it—but unless it’s linked to tens of thousands of IoT sensors verifying the level of chemicals, pollution, freshness, or any number of other verifiable “measures,” getting duped with blockchain is still a possibility.
Blockchain’s Limits: It Scales Poorly
The way blockchain is designed is both good and bad. On one hand, every node in the chain holds every tiny piece of history that came before—plus its own next step. Redundancy never hurts, right? Right—unless you need to process something quickly. And because of its redundant design, blockchain—especially once it scales beyond the first few steps of verification—is slow. Like—turtle slow. So slow that some may consider it unresponsive, which could cost you business. Which begs the question: are our customers more concerned with speed or trustworthiness? Personally, I think most customers today would be willing to take a risk on quality if they knew they could get their item quickly—which doesn’t bode well for the future of blockchain, at least until it gets its motor running.
Blockchain’s Limits: It’s Not a Mind-reader
Say you’re using blockchain to simplify your online marketing contracts with numerous vendors. You want to make sure the right eyes are seeing your ads—and clicking through to your site to, hopefully, buy your product. The thing is: blockchain can verify the ad is being shown the people who say they are in your target. But are they telling the truth? Did they lie about their age? Their intentions of buying a new car within the next six months? Their net worth? At this point—unless blockchain is linked to a smorgasbord of other blockchain s and sensors verifying this information, you’re still at the mercy of trust.
Honestly, when it comes to blockchain’s limits, the largest is that no one is really using it en masse yet. And until it hits the point where it’s part of everyday use—as in, we’re all chipped and verified without our even knowing it—it will always need to be used with a healthy bit of skepticism. Yes: it turns out even blockchain can break our hearts.
The original version of this article was first published on Forbes.
Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. From Big Data to IoT to Cloud Computing, Newman makes the connections between business, people and tech that are required for companies to benefit most from their technology projects, which leads to his ideas regularly being cited in CIO.Com, CIO Review and hundreds of other sites across the world. A 5x Best Selling Author including his most recent “Building Dragons: Digital Transformation in the Experience Economy,” Daniel is also a Forbes, Entrepreneur and Huffington Post Contributor. MBA and Graduate Adjunct Professor, Daniel Newman is a Chicago Native and his speaking takes him around the world each year as he shares his vision of the role technology will play in our future.