Sten Vesterli's Blog

Making IT Live up to its Promise

Tag: Blockchain

Blockchain is Still a Solution Looking for a Problem

IT Leadership, Technology That Fits, ,

It turns out nobody wanted a blockchain solution. There are still crypto enthusiasts hodling their Bitcoin, but enterprise blockchain was a solution in search of a problem.

I did believe Danish shipping giant Maersk Lines and IBM had found a place where it made sense to build something blockchain-based when they announced their TradeLens platform. The idea was that all the many, many people involved in shipping a container of plastic bric-a-brac from Shenzen to Long Beach would all put their information on a blockchain. That would provide an immutable history of everything about that container.

After IBM closed down its entire blockchain business earlier this year, it was a matter of time before Maersk pulled the plug. Today, they admitted that “TradeLens did not reach commercial viability,” and the project is officially dead.

I believe a land register in a corrupt country somewhere was also planning to use blockchain, but it’s been a while since I last heard about it. In all likelihood, the existing corrupt businessmen and politicians have killed it.

If you know of any successful enterprise blockchain project, I would love to hear about it.

A Value-Destroying Technical Innovation

IT Leadership, Technology That Fits, , , ,

The important part is not the technology itself. It is how it interacts with its surroundings.

The big Ethereum upgrade (aka “The Merge”) seems to have been successful from a technical standpoint. But it seems that the Ethereum community focused on the enormous technical challenge of merging the existing Ethereum blockchain with another without stopping either. The problem is that changing from proof-of-work to proof-of-stake turned Ether tokens from a currency into a security. When you “stake” your Ether, you earn interest. And suddenly, the Ethereum ecosystem is subject to U.S. Securities and Exchange Commission (SEC) rules. Consequently, Ether is down 26% this week.

You can implement highly advanced technology with enough skill, time, and money. But unless you have someone skeptical think through how your tech will interact with its environment, all of the tech wizardry might go unused. It might even be destroying value as the Ethereum Merge did.

Do You Understand What You are Running?

IT Leadership, Technology That Fits, ,

Don’t run systems you don’t understand. Some people had placed billions of dollars into a cryptocurrency called TerraUSD. They were told this was a “stablecoin” that would keep a value of $1. Underlying this claim was a clever algorithm that interacted with investors and another cryptocurrency in complex ways. Until its magic no longer worked and the supposedly stable TerraUSD dropped 80%. Trading in it is now halted.

In the global financial crisis of 2008, people had invested in complex financial instruments that they didn’t understand. Many billions were lost and large institutions went bankrupt. The banks who came out of the crisis unscathed were those who had stuck to simple banking products that everyone could understand.

Take a look at your IT landscape. Can you find somebody who understands your operating infrastructure? Or have generations of DevOps engineers just googled problems and tweaked your Kafka and Kubernetes configuration until it somehow seemed to work?

Why isn’t This a Bitcoin Moment?

Spiritual Programmer

This was supposed to be Bitcoin’s finest hour. We have inflation, war, sanctions and economic turmoil. Since Bitcoin is supposed to be kinda like digital gold, you would expect the laggards to see the point and pile into Bitcoin in these uncertain times. But they don’t.

If cryptocurrencies don’t have their moment now, they will remain a fringe speculation object and never replace fiat currencies. If you hold crypto, I think a large part of your proposition has been disproven.

Do you Really Need Blockchain?

IT Leadership, ,

It is reported that the IBM blockchain team has been gutted, even though IBM vehemently denies it. Enterprise blockchain seems to be in retreat across a wide range of industries.

Organizations with high value maturity have solid processes in place to calculate the business benefit of new technologies, and only a few of those invested in blockchain. But organizations with a lot of legacy technology who felt the need to jazz up their tech portfolio enthusiastically embraced blockchain and started vaguely defined projects

If you are a CIO, take a look at your project portfolio. If you have blockchain projects on the list, have an experienced analyst from outside the project team take a good look at the business case. If she reports back that it is based on overly optimistic assumptions, it should be re-evaluated. If that means the costs outweigh the benefits, the project should be cancelled.