Blockchain Current Events: 2021 Current Events: 2022 Current Events: 2023

Blockchain Bunk

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Seth Godin on NFTs. Thank you, Seth.

I cannot think of a technology with more nerdy complexity that has been popularized as brainlessly as blockchain. Even the best technology communicators remain challenged to concisely and adequately explain blockchain and its attendant dynamics to the average person. It might actually be easier to explain relativity than it is to explain blockchain.

In a world where soundbites rule, this is a problem.

In the industry I serve as a technology professional, people routinely opine that blockchain is a solution to food supply chain traceability. It’s not. Here’s an interaction I had with a university professor last year, who had written a major scholarly article supporting blockchain in the food supply chain:

Dear Dr. {name withheld},

Happy new year! During the holidays, I got caught up on a bunch of journal reading that had been piling up over the fall, and I happened upon your thoughtful article in {journal withheld}.

I’m very much in the middle of the food supply chain, and my feelings about the use of blockchain are perhaps a bit different from others’. The idea of blockchain for the food supply chain has baffled me. In my estimation, blockchain can only truly safeguard digital products and transactions, not physical ones, which are subject to human tampering that is difficult to prevent in many product categories. I honor and respect blockchain’s ability to provide a ledger, but since the digital metadata for physical product can so easily be severed from that product in a variety of ways, I am not sure that blockchain’s robustness is as meaningful as it is with fully digital assets. Surely a less resource-intensive ledger method can provide a level of assuredness that is on par with what blockchain could provide, without wrongly implying that there is a 0% chance that product could have been tampered with by interstitial handlers.

Do you have any thoughts on this matter, and what I might be missing?

Thank you for your thoughts!


His response?

Hi Drew: You are right — there is no 100% certainty that food products are not tampered. Blockchain deployment in food supply chain may increase the costs of engaging in fraudulent activities. Combining with other technologies such as AI, robust QR codes might help . . . . Other benefits of blockchain may include brand reputation (consumers’ better perception of the brand), efficiency, speed, reliability and reduction in paperwork with digitization.

Who cares if the food is tampered with? Blockchain is good for consumer brand perception. Makes sense. </sarcasm>

This stuff is all over the place:

“…the ledger is considered immune to tampering.”

But what about those boxes?

Blockchain is useful for a few things, but its true and original value proposition is in the protection of digital things that need to pass from entity to entity. Bitcoin? Of course. Food? Not so much.

None of this even takes into account people’s misunderstanding of how much power blockchain takes to do what it does.

Thankfully, Seth did that.

Do you have stories about people employing blockchain in senseless ways, guided by their misunderstanding of it all? Join the discussion at the links below.

April 5, 2021 update: More bunk.

January 19, 2022 update:

May 17, 2022 update: People are catching on.

June 7, 2022 update: More bunk.

June 28, 2022 update: A great exposé on the bunk.

November 8, 2022 update: Could this be any more obvious?

December 2, 2022 update:

May 20, 2023 update: The Price of Crypto.

September 24, 2023 update: NFTs are officially bullshit.

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Blockchain Current Events: 2022

Crypto + Time < Crypto

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It seems that every day, we are getting better reporting and research to illustrate the fragile houses of cards we know as blockchain and Bitcoin. I’ve enjoyed tracking and sharing some of the choicest tidbits as postscripts to my first article on the subject.

I am troubled by the confidence that many people have in these technologies. Here’s what I tell those people:

Cryptocurrency is everything money professionals don’t understand about money combined with everything computer professionals don’t understand about computers.

This week’s most revealing academic work, which was nicely summarized in the The New York Times, highlighted the ‘decentralization theater’ that underpins Bitcoin. It is a must-read if you wish to stay on top of the latest in the ongoing dialog. What it also highlights, in its final paragraph, is something that we mustn’t lose sight of, and which I have attempted to summarize in my pithy headline for this post: what is encrypted today is not likely to stay encrypted tomorrow. Have a taste for what the authors were able to achieve from their research, and then understand that we are not too far away from quantum cryptography that brings us even closer to all of the details of the Bitcoin blockchain, and you begin to see how much “bunk” we are all being served.

You might like to take comfort in the fact that NIST is working on Post-Quantum Cryptography, but what does that portend for the contents of today’s blockchains? Some people project that we will move our crypto assets to newer technologies, but the remnants of today’s transactions will remain ripe tomorrow’s analysis. Even technology providers like IronCore Labs, who offer solutions in “crypto agility” (which, on the surface, sounds like a very good thing) will tell you that “That data is public and copies of it exist around the world. There’s no way to protect that data if an algorithm is broken or weakened, and that data will still be there twenty years from now. The future of blockchain in a post-quantum world is concerning.”

All of which is to say that, as a career CTO & CIO, I find that so much of our time is spent in the role of goalie to help deter the pucks being thrown at our organizations and their employees. It’s a tiring role because the situations we are protecting our organizations from are so much more complex than they used to be. Anecdotally, it is the minority of software and IT professionals who truly understand the holes in what’s going on right now; many are just as susceptible to the rhetoric behind the technologies as the neophyte on the street. All of this is ultimately demoralizing, because our time would be vastly better-spent — in almost all cases I can think of — on strategic things.

Goalies unite! The best tool in our arsenal is a public discourse to support one another as we fend off the bad information on a journey toward the good. Share these articles we find (as this site does so well), and continue to be critical of the bunk being hurled at us every single day.

James Reimer

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Blockchain Current Events: 2022 Technology of the Year

Technology of the Year, 2022 Edition

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I’m a blockchain critic (in the company of countless others, as noted in the evergreen postscript on Blockchain Bunk), but I hope that this year’s Progressive CIO Technology of the Year doesn’t surprise you.

The Ethereum Merge was, in my eyes, the most important technology achievement of 2022.

Proof of Work was a reasonable way to kick off the cyber currency revolution, but it is not sustainable in its scalability, and the decentralization ideals behind the model have proven dubious. If the evolution of blockchain structures has taught us anything, it’s that decentralization continues to be alien to us.

My professional lifespan has been bookended with philosophical engineering movements whose aim was to prove that decentralization makes more sense than centralization. Over 30 years ago, Microsoft introduced Object Linking and Embedding (OLE), followed by IBM and Apple’s collaboration on OpenDoc. During those years, I served as an IT Director for a small publishing company, whose leadership was intrigued by these ideas, which were more academically interesting than practical. It was certainly neat-o for Joe’s PowerPoint to point to an Excel range in a document resident on Jill’s hard drive as well as a paragraph from a Word document on Mark’s drive. But who would want to keep track of the existence of these documents to ensure that Joe’s PowerPoint would function properly? What if Jill wanted to trash her ideas? What if her computer was off? What if Mark was fired, and his work proved to be a toxic force? Who was responsible for ensuring good enough computer hygiene to guarantee this would all work?

In those days, I remember asking my boss: if IBM thought peer-to-peer document links were the right architecture for enterprise work, wouldn’t they have designed the IBM System/360 in accordance with these ideals? So why didn’t they? Because anxiety:

  • Would you want your home to have its contents scattered between you and your place of work?
  • Are your cooking implements found in several rooms around your house?
  • Are your toiletries in your kitchen and living room?
  • Do you use a different keychain for each key? Do you keep each key in a different place?
  • Do you have a different bank for each dollar in your savings?
  • When shopping for groceries, do you enjoy visiting more than one store to gather everything you need?

We all want related things to stay together, as much as possible. Decentralization, in the vein of OLE and OpenDoc, makes us anxious. “What if Jill’s computer dies?” “Where is this information coming from again?” “Explain this to me again? How do I know it won’t move or disappear?”

In the wake of the thought experiments of OLE and OpenDoc, the Internet happened — boom, like that — bringing renewed and awesome focus to centralized information sources. OLE went on to become ActiveX (with a very different focus), and OpenDoc died. The client-server resonated with the human spirit, and it still does. With the Internet, every information resource had a canonical location, and it Just. Made. Sense.

Here we are, nearly a third of a century later, and the cryptocurrency movement asserts that we’ve been doing currency all wrong for 5,000+ years, calling centralization into question once again. No matter what the blockchain diehards assert, however, decentralization remains more theater than reality.

The Ethereum Merge was a risk not just in its technical execution, but in its philosophical positioning. It was the boldest of bold moves in a year overflowing with crypto failures that boggled human comprehension in more ways than one.. It has advanced the public dialog about transparency and decentralization theater, eschewing decentralization religion in favor of human comprehension.

While OpenAI, ChatGPT and the like might be popular candidates for this year’s award (and, despite widespread coverage, are very much works-in-progress that demo well for a few minutes but whose limits are quickly reached—better candidates for a future award), Ethereum’s move to Proof of Stake was a bolder statement. It is an honest and transparent step toward something more controversially centralized. The model, while lacking the abstract and religious purity of the Proof of Work blockchain, is easier for people to comprehend. The Merge didn’t just reduce Ethereum’s power consumption; it made it more possible for people of average intelligence to comprehend WTF is going on with the underpinning value proposition of ETH. Beyond that, more importantly, it increases the chances that cybercurrency will either have to significantly transform itself in order to meet a real need, or disappear altogether. Either of those things will be better for humanity than what we have today.

All this said, I wouldn’t be me if I didn’t remind you: there’s a lot more work to be done. The Ethereum Merge didn’t solve many things:

  • The misapplication of blockchain to physical goods;
  • The unfounded assertions that blockchains are hack-proof;
  • The fact that today’s cryptocurrencies are actually investments with significant risks associated with them, and that they need to be regulated by bodies like the SEC;
  • The entire idea of Web3, which needs a decentralization reality check of epic proportions.

If a technology move is significant enough to drive public discourse about the state of the human universe, it deserves our attention. This is why the Ethereum Merge is the Progressive CIO Technology of the Year for 2022.

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