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Bitcoin turns 10 — but is blockchain living up to the hype?

Posted by Chris King on 31st October 2018

The 31st October 2018 marks the 10th anniversary of the paper: ‘Bitcoin: A Peer-to-Peer Electronic Cash System’. Published under the pseudonym Satoshi Nakamoto, it presented the idea for a “peer-to-peer electronic cash system” with the potential to revolutionise the traditional financial system. The paper captured the zeitgeist of a world craving change in the wake of a massive financial crisis and society’s general lack of trust in banks and politicians.

A few months later the bitcoin network officially launched and the rest, as they say, is history. The cryptocurrency gold rush that ensued has seen billions invested into bitcoin (and the many other alternatives now available) based on an idea that you can get rich for free.

Over the last 10 years some have won big, others have failed miserably. Spare a thought for James Howells who in 2013 accidentally threw away a computer hard drive containing 7,500 Bitcoins (worth around £36m at current market value). Apparently it still sits buried beneath trash in a landfill site near his home in south Wales.

Bitcoin mining has even become so big in Iceland (the country not the frozen foods emporium) it has caused an energy shortage. Energy usage from mining projects already exceeds that of all Iceland’s homes. With more and more of the population keen to get in on the act there are genuine concerns the country will run out of energy.

But as with all good hype cycles, more recently, talk has turned to when the Bitcoin bubble will burst. Windsor Holden, from market research firm Juniper Research in his latest report argues: “Bitcoin has no intrinsic value. Like any asset, it is worth whatever someone is prepared to pay for it, but it has no meaning or existence beyond the confines of the ledger. It is a bubble, and there is a strong possibility that this bubble could burst in the near future.”

Regardless of your perspective and experience of bitcoin it’ll be interesting to see what happens over the next 10 years. But for me the more pressing question is what about blockchain — the technology underpinning Bitcoin? Scan the technology media and you’ll see plenty of hype about the technology, while others argue that it is still largely at the fringes, unable to truly break into the mainstream.

Other than Bitcoin, blockchain has other big pioneers. IBM for example, is heavily pushing blockchain. It is working with Walmart to track food through its global supply chain and shipping company Maersk on a platform for the container shipping industry. Chinese retail giant Alibaba is also using blockchain with its subsidiary payment platform Alipay.

At a tech for good level has created a blockchain platform that brings transparency to social funding. It allows charities to show donors exactly what impact their individual donations have made and what their money was spent on… be that life-saving medication or office paperclips and toilet roll.

For other positive reinforcement about blockchain I recommend: 17 Blockchain Applications That Are Transforming Society.

However, according to a recent survey by Capgemini few firms have fully embraced blockchain. Similarly, CNBC’s article at the start of 2018 suggests blockchain applications are still years, even decades away. So, with so many conflicting views, what’s the answer? Is blockchain living up to the hype?

Personally, I’m going to side with someone who knows what he’s talking about… Apple co-founder Steve Wozniak. Wozniak’s balanced view is that blockchain’s current hype is definitely overstating the reality but that in the long-term blockchain technology will serve as a cornerstone for business and industry because it’s “decentralized and totally trustworthy.”

I guess we just need more time to properly let the reality catch up with the opportunity.

The inspiration and various source materials for this blog came from BBC Technology of Business.

Chris King

Chris’s extensive experience of agency PR, ‘can-do’ attitude and track record for achieving outstanding results time after time make him a firm favourite amongst clients. His natural teaching skills make him an expert mentor and respected MD.