Excerpt from Attack of the 50 Foot Blockchain by David Gerard

Business bafflegab, but on the Blockchain

If you’re a business guy you could look at the current construct versus the new construct and say ‘aren’t you just building a big database?’

– Charley Cooper, R3 Blockchain Consortium

As Bitcoin became more famous, its dubious nature became increasingly obvious to mainstream observers. So the buzzword of choice shifted from “Bitcoin” to “the blockchain”, or just “Blockchain”.

This really meant the Bitcoin blockchain, as the goal was to get interest up and the price with it. This particularly picked up around January 2015, when the Bitcoin price had cratered. The value proposition was that Bitcoin was the most secure chain as it had the most hashing power, so everyone wanting a blockchain should use that one. However, the limit of 7 transactions per second worldwide, blocks often being full anyway so transactions can’t get through, and that your Internet of Things light bulb was profoundly unlikely to add enough flash memory for 100 gigabytes of SatoshiDice spam were all a bit too obvious to the prospective suckers.

But by late 2015, “Blockchain” hype had taken on a life of its own as a business buzzword. If in a manner somewhat uncomfortable with its Bitcoin origins.

In the real world, nobody outside the cryptocurrency subculture uses blockchains proper, because they are ridiculously impractical and the most prominent one uses as much electricity as all of Ireland. This means their fantasy life is rich indeed.

Repeat to yourself: if it sounds too good to be true, it almost certainly is.

What can Blockchain do for me?

If you start with “... but with Blockchain!”, then putting lots of different words before “but” isn’t likely to result in something that’s actually useful, not just interesting.

Merkle trees are excellent, and business is about to discover how to use them for tamper-evident transaction ledgers. These will likely be branded “Blockchain,” whether or not the product has anything else to do with blockchains. Merkle trees are the only good part of blockchains.

(If you have programmers and they save their code in Git, it’s got Merkle trees in – you can tell your management “oh yes, we’ve been using blockchain-related technologies for years now ...”)

Business Blockchain marketing claims are largely divorced from tawdry considerations of technical or economic feasibility, mathematical coherency or logical consistency. Normal people see these claims, see obvious uses for them in their own business and are left with the impression “Blockchain” can get them these things.

Some of the claims are sort of true in some sense, others are completely fanciful. Many claims start from a hypothetical use case – often lifted directly from the most fanciful Bitcoin advocacy – then tout the hypothetical as if it were an existing and practical technology.

IBM’s “What is IBM Blockchain?” page1 is a good example. Almost every “is” statement on that page is a “might” or “could” – no blockchain does all the things it describes in present-day terms, and certainly not Hyperledger, the basis of IBM Blockchain.

Many blockchain schemes promise the magic of full availability of properly cleaned-up data. The actual problem in every case is cleaning up the data in the first place; the barrier that such efforts founder on, over and over, is that no industry’s players want to create such a new monopoly. The proponents’ business goal is usually to become the organisation effectively controlling the newly cleaned-up data, with a monopoly maintained by network effect.

If your big goal is cleaned-up data across multiple organisations, the approach that will get you there is creating a data schema that is so obviously and elegantly the right thing that everyone just adopts it themselves, and a regulator eventually says “hey, use this schema.” Note lack of blockchains. (This is the usual approach in computing, though even there companies routinely try to set themselves up in the role of central octopus.)

If someone is trying to sell you on blockchains, the obvious skeptical questions will get you a long way:

Blockchain marketers frequently claim a prominent company “is using” a blockchain when there’s just been a press release that they are “investigating” running a future trial. This is because an “investigation” is cheap (this book is a legitimate business expense for this purpose, by the way), and worth the PR value in showing you’re fully up to date with current buzzwords. “Researching the opportunities” could mean anything, but almost certainly does mean nothing.

A sure tell of a reality-free writeup, completely detached from earthly considerations, is when a writer talks about “Blockchain”, capital B, no “the”. You should try mentally replacing the word “Blockchain” with “Cloud” and see if the article seems eerily familiar. Also try the previous business technology buzzwords “big data”, “NoSQL”, “SaaS” and “Web 2.0” and see how it works with those.2


1 Nathan C. Bybee. “What is IBM Blockchain?” IBM Blockchain, 2 September 2016. (archive)

2 I commend to you “Ignoring Blockchain Is Corporate Suicide: Why Blockchain is the biggest single threat to all CEOs for destroying corporate value” by Nick Ayton, in analyst newsletter Innovation Enterprise (7 July 2016) (archive). In the several years I’ve been following Bitcoin and blockchains, this is the single worst, stupidest and most incoherent piece of “Blockchain” hype I’ve seen; you definitely need to read it, to inoculate yourself against the worst excesses of this foolishness.

Ayton spends the first third of the article repeating how devastating Blockchain will be to business, the second third making technically garbled or meaningless unsubstantiated claims about the future and the last third on a list of predictions, many of which have already been shown unfeasible and three or four of which are literally out of ’80s cyberpunk science fiction, as if he read too much William Gibson as a lad and thinks Blockchain will make Mona Lisa Overdrive real – “augmented reality using VR and holographic systems will feed off sensory layers that will sit on the Ledger of Things connecting the world”, clearly visible to your new Zeiss-Ikon eyeballs.

I know of one case where a non-technical manager inadvertently sent this link around their company; they quickly realised how relentlessly terrible everything about blockchains actually is – anyone who’s survived in business where sales people exist doesn’t need to be a techie to notice there’s something deeply wrong and lacking in blockchain hype – but the article had by then caught the attention of upper management. The manager found themselves in the position of designated expert and having to quell this idea, mostly by a process of translating why none of this could ever work into sober and considered business speak from the original profanity-laced screaming.


Excerpt from Attack of the 50 Foot Blockchain by David Gerard