Still crazy about blockchain? Gartner helps you recognize the "five myths"

Gartner, a well-known international market research organization, has observed that there are many signs that blockchain fever has exploded since August 2015. In fact, although the HyperLedger project sponsored by the Linux Foundation was not established until the end of 2015, the project has since rapidly expanded from the initial 30 founding member companies to 55 members, and there are 2,300 member applications pending. Brian Behlendorf, executive director of the Linux Foundation HyperLedger project, also visited China in July this year. He introduced that the Linux community's enthusiasm for blockchain is much higher than the second most popular open source project. In addition to major technology companies quickly gathering around the HyperLedger project, the world's 45 major banks have formed another major power group around the R3 project. Capital is also very optimistic about blockchain projects. The "2014-2016 Global Bitcoin Development Report" shows that the blockchain industry has received more than one billion US dollars in investment. However, Ray Valdes, vice president of Gartner Research and academician analyst, pointed out during a recent visit to China that the blockchain architecture system is completely opposite to the current business system mechanism that has been running for more than 300 years. So, what strategy should be adopted for such a disruptive new technology? Be prepared to expire in 24 months. Among all the views mentioned by Ray Valdes, the most valuable is what strategy or mentality corporate executives and technical directors should use to view emerging technologies such as Bitcoin and blockchain. Ray said that we must first understand the basic pattern of blockchain in the global market. It is expected that there will be about 30 major blockchain technology suppliers in the world, and they will compete fiercely with each other, but it is difficult to predict who will be the final winner. In the long run, one judgment that can be determined is that no matter what blockchain technology or platform is currently chosen, the possibility of being eliminated within two years will be very high. Therefore, for this new technology risk, Ray recommends that corporate executives and technical directors consider it from a strategic perspective. In fact, whether it is blockchain or other hot emerging technologies, any investment and project launch decisions must be at the tactical level. This means that although the technology platform will continue to evolve and transform, its core concept will remain consistent. Then, the attitude and strategy for emerging technologies such as blockchain are: first, carefully choose a more appropriate business moment that can be used in new technology scenarios; second, always keep in mind that any choice today is likely to expire in the next 24 months, and be prepared to switch to the next technology platform; third, you must learn and understand in this process how new technologies can create new markets, new products or new services for enterprises, and establish new business models, so as to be more suitable for the requirements of the new era. Five "myths" of blockchain The core scientific and technological philosophy of blockchain is to increase trust in a distributed, decentralized, non-trust environment, and to form value that can be spread throughout the entire network system. Ray pointed out that there are five myths about blockchain. The first is that because blockchain is explicitly designed to be decentralized, its scalability and scale capabilities are poor. Bitcoin blockchain is currently the only operating system-level, large-scale blockchain available in the real world, but because the maximum limit of Bitcoin blocks is 1MB and the confirmation delay is 10 minutes, it can only execute at a speed of seven transactions per second (tps), which is far lower than Visa's peak processing capacity of 47,000 tps. The second biggest myth about blockchain is that many people think that the Bitcoin blockchain supports real-time payments. The error in this myth is that it takes at least ten minutes for the Bitcoin blockchain to form a record, and in some cases it takes an hour or even longer. In theory, an attacker can establish another branch chain, thereby forming a double expenditure. The third biggest myth about blockchain is decentralization. Many people think that blockchain is a decentralized model, but in fact, since the entire Bitcoin computing resources are highly concentrated in the hands of certain specific companies, that is, up to 80% of the computing power is concentrated in four mining pools, and all of these four are located in China. Therefore, any two of these four companies can theoretically collude to control the ledger. The fourth biggest myth about blockchain is that many people think that the blockchain ledger is immutable. But in fact, taking the Bitcoin blockchain as an example, it is roughly estimated that any third party with $400 million in funds can rewrite the entire blockchain ledger until the first initial block. The fifth biggest myth about blockchain is that many people think that blockchain is a "magic" database technology. In fact, the ledger of the blockchain uses a flat file, which is a linear list of simple transaction records. Moreover, this list can only add records but not delete them, so the file size is growing indefinitely. At present, the Bitcoin blockchain ledger has reached 50GB, and it must be copied in every node in the network. Of course, many financial institutions and technology companies are very interested in the concept of blockchain and are trying to overcome the various drawbacks of Bitcoin blockchain through technical improvements, but they are still in the design or proposal stage and have not yet been put into practice. Disruptors will come from outsiders . Ray talked about the fact that there are about 30 technology suppliers in the world competing for the right to speak on blockchain technology. But from historical experience, it is often difficult for the more mature technology suppliers to maintain their position in the final elimination round. Going back to the 3W era and the e-commerce era, the companies such as Amazon, Tmall, Alibaba, Taobao, Facebook, Baidu, etc. that were formed at that time were not traditional technology suppliers that existed at the beginning of the Internet. "In the next stage, we will enter a world called the Internet of Money or the Internet of Value. In such a stage, just like the original Internet of Data and Internet of Content, the technology companies that will eventually win should not be mature companies, but new companies." A digital payment company called Circle, founded in 2013, provides consumer financial services for digital currency storage and national currency exchange services. Using Circle's APP, users can initiate instant transfers, payments and receipts in the form of messages without any handling fees, similar to the real-time transfers in WeChat. Based on blockchain technology, Circle can also realize global currency circulation. In June this year, Circle announced that it had received US$60 million in Series D financing. Gartner believes that blockchain generally belongs to the programmable economy, but the road to the programmable economy is very long and may take decades, just as the Internet and the network economy also took decades to fully develop. In the short and medium term, companies need to be prepared for a world with multiple blockchains.