The ‘revolutionary,’ ‘change the world’ promise of decentralized, permissionless blockchain solutions (including most cryptocurrencies) may be descending into a quagmire of get-rich-quick schemes, scams, and organized crime activity, but blockchain as a whole is not dead yet.
What remains above the waterline: a quieter hotbed of innovation we call ‘enterprise blockchain.’ As opposed to their problematic crypto cousins, enterprise blockchain solutions are largely permissioned and centralized – thus potentially making them safe for corporate use.
These two trends are so different, in fact, that we shouldn’t lump them together under any moniker, let alone one as overhyped as ‘blockchain.’
And yet, the differences aren’t quite in the night-and-day category. Even though enterprise blockchain has an unquestionable business focus, it is still too early to tell which enterprise blockchain approaches will become viable long-term.
Protocols, Mechanisms, and Architectures: You Pays Your Money, You Takes Your Chances
People like to compare today’s emergence of blockchain to the early days of the commercial Internet. However, this is a poor comparison, as the Internet’s early success depended on broad acceptance of basic protocols like TCP/IP, and for the Web, HTTP and HTML.
Blockchain has no such acceptance. Not only are there no meaningful protocol standards in the works, but there isn’t even any agreement on the best mechanisms for making blockchain work at all.
Consensus mechanisms are the best example of this problem. Bitcoin uses the ‘proof of work’ mechanism which enables the transaction processing nodes (aka ‘miners’) to battle for a reward – but ends up consuming impractically vast quantities of electricity.
In response, enterprise blockchain innovators have developed numerous alternative consensus mechanisms, each with its own strengths and weaknesses – and generally, none are interoperable with any of the others.
Intellyx publishes the Agile Digital Transformation Roadmap poster, advises companies on their digital transformation initiatives, and helps vendors communicate their agility stories. As of the time of writing, Boardwalktech, BTL, Decent, IBM, and SAP are Intellyx customers. None of the other organizations mentioned in this article are Intellyx customers. The author does not own, nor does he intend to own, any cryptocurrency or other cryptotokens, neither long nor short. Image credit: Ted Knudsen.