When was the last time you talked about blockchain?
Maybe 18 months to 2 years ago when the world was new, Broadway was open, and blockchain was everywhere. And then it wasn’t.
Blockchain didn’t leave us, its golden promise as solution to all tech problems ran firmly into reality. A distributed ledger can be a neat tool for some applications, but it is hardly worth changing your name to Bobby Blockchain just for the extra recognition. In addition, the fact that many people committing – or hoping to commit – outright fraud by hyping a little-known or understood technology helped raise expectations through the roof.
Bill Gates (and Arthur C. Clarke and others) is famously quoted saying that most interesting technologies are overestimated in the short run and underestimated in the long term. This is likely true about blockchain technology.
Exploding on the scene as the seemingly unstoppable back-end for Bitcoin and other cryptocurrencies, blockchain seemed a new idea with endless possibilities. Blockchain was the Tulip of 2016-2018. Digital currency company Colu raised nearly $20 million two years ago in an initial coin offering (another flash in the pan) selling its own digital tokens based on a blockchain. In 2017, an unprofitable drink company saw its shares jump nearly 300% after changing its name to Long Blockchain Company.
But it turns out that a distributed ledger is not perfect for every new application. According to a Wired story, “Blockchains offer an immutable ledger of data without relying on a central authority—that’s core to the hype behind the technology. But the cryptographic machinery behind blockchains is notoriously slow. Early platforms, like Ethereum, which gave rise to the ICO frenzy, are far too sluggish to handle most commercial applications.” And so most current projects inspired by this technology are not really blockchains as we might recognize them. Wired writes that above 95% of new such applications “take shortcuts. So-called permissioned blockchains borrow ideas and terms from Bitcoin, but cut corners in the name of speed and simplicity. They retain central entities that control the data, doing away with the central innovation of blockchains.”
Into this picture walks Ant Group – the soon-to-be-public Chinese tech giant affiliated with Alibaba and billionaire Jack Ma and valued at $200 billion – with its new technology brand AntChain and a blockchain-in-a-box called the AntChain Station. Ant Group is a serious player by any calculation and we should attend to their decision to bring a blockchain machine to the market.
The part that interests me about the new AntChain computer is this statement picked up in the business wire, “Ant Group also unveiled AntChain Station, an all-in-one workstation that reduces the deployment time of the company’s blockchain-based solutions by as much as 90%. This enables enterprise clients to set up AntChain within an hour, which is significantly lower than the previous average set-up time of 10 hours.” Before this equipment, deploying AntChain would involve installing sets of software and “preparing the environment on general-purpose hardware.” The new equipment is also said to increase transaction speed by 30%.
Given that high power usage, slow set-up and slow operational times have been primary practical elements holding back the implementation of blockchain applications, this new hardware/software solution may make blockchain more practical for a host of new solutions. There may not be as much buzz about blockchain now, but if companies really want to implement it, AntChain may have delivered a product that opens this door again.
The AntChain Station looks like it will be available through marketing arrangements with Dell, H-P and Lenovo for those who want access in the West. In addition, according to Yahoo! Finance, the Station “also aggregates other digital technologies including AI, Internet of Things (IoT) and secure computation.” I don’t know exactly what this means or how these technologies support the mission of making blockchain easier to implement and use, but if set up in a thoughtful manner, AI built around this application could also be a game-changer. And it is never wrong in today’s world to focus resources on easy and solid security.
Finally, the solution is portable, so it can be used more flexibly than a set of servers bolted to the floor – especially in the mobile, work-from-anywhere world that will emerge from the current pandemic crisis. And it comes with the strength of Ant Group, “the largest productivity blockchain platform in China, with the ability to process and support one billion user accounts and one billion transactions every day. Currently, over 100 million digital assets are uploaded onto AntChain on average every day.”
We may have seen the high water mark for blockchain in the mad dash for ICOs and impossible Bitcoin prices. But something tells me the “short run” overestimation finished 18 months ago, and now is the time when blockchain may fully come into its own. Welcome to the long run.
Copyright © 2020 Womble Bond Dickinson (US) LLP All Rights Reserved.National Law Review, Volume X, Number 205