22/09/19
Upwork recently reported more than 6000% year on year growth in the demand for blockchain skills in Q1 2018. It is no surprise that The Straits Times similarly suggests that Blockchain mastery is among the top 3 rising skills in Singapore — with a higher prominence here, in Singapore, than in “other Asia Pacific economies”. Furthermore, late last year, Temasek Holdings set up a team (“experimental pod”) to focus on exploring opportunities in blockchain technology, which it sees as “(a long term trend) impacting multiple industries and geographies, according to an internal memo obtained by Bloomberg.”
Despite this, in my estimation, I would argue that those who understand at least the potential applications and use cases for blockchain technology across various verticals beyond cryptocurrency number less than one thousand people in Singapore.
Out of 3,715,000 working adults, that’s about 0.0269% of the population.
This is a problem if we aim to really reap the benefits of blockchain technology beyond DeFi, which is still a largely uncharted space. PM Lee Hsien Loong stated in his speech at the Singapore University of Social Science (“SUSS”) that “blockchain is a fabulous idea… and there are places where it will be used, and there will be many places where you will try to use it but you do not actually need it”.
During my past 4 months at Tribe Accelerator, I’ve been exposed to numerous companies and the blockchain ecosystem in Singapore. In that process, I was slowly learning exactly that — where and how it could be used, and how people are trying to use it but do not actually need it.
I’ve got to learn a lot from my team, who have empowered me and guided me through my journey in the enterprise blockchain ecosystem. I’ve also got to meet many startup founders that are doing foundational work with real use cases at the frontier of technology, and have been encouraged to embark on continual hands-on learning opportunities by my team.
For example, I was allowed to participate in the IBM Blockchain Design Thinking Workshop that was held for the startups, where we looked at the “As Is” situation for a supply chain transaction (we chose to map the journey of durians from Thailand to Singapore), and map out where business value might be added, before finally linking it back to blockchain technology in our “To Be” situation. Adrian from Dimuto basically walked our group through the process, because his company is doing exactly that — track and trace for physical products using blockchain technology.
After thorough exposure to the various players in the blockchain space, I found that there was so much I did not know. I would be able to grasp the business models of our startups, but only after much revision and conversation. I found precious little that I could learn from (1) going to meetups, where I was confronted with incredibly technical (and very intelligent!) developers and members of the blockchain ecosystem in Singapore and beyond. I also found that most of the meetups out there were related to cryptocurrency and decentralised finance (DeFi).
But these meetups, while engaging, did not help me to learn more about how to design the blockchain applications that PM Lee was talking about — that the Straits Times was talking about, that IMDA was pushing. I wanted to learn more about the applications that companies such as IBM, Intel, Microsoft, BMW and Ubisoft were looking at. I could not rigorously answer why a blockchain was needed over a database, sometimes when I was questioned by some of my more interested Yale-NUS classmates, about some of the use cases. And so I felt I had to venture to learn more.
Put another way, I felt that my knowledge about blockchain use cases beyond DeFi was not secure, or had not been cemented, as Professor Danvy would have put it (repeated over many Functional Programming and Proving lessons). A mathematical, computational and statistical sciences education at Yale-NUS College did not teach me anything specific about blockchain foundations and use cases — but this education helped prepare me for being able to pick up new concepts at the frontier of technology, which I am immensely grateful for.
We are in a truly wonderful world, where portals like Coursera, Udemy, Udacity, Lynda, and now LinkedIn are democratizing education and learning — you can learn the latest technologies, design and thought patterns from experts all over the world. This also applies to blockchain technology, with 630 search results for Ethereum showing up. Online courses, anywhere, for less than the cost of 5 cups of bubble tea. Coursera gives away its courses for free. (You can audit them!)
However, out of these 630 courses, how do you know which makes sense, and which doesn’t? There are numerous sources of news for the blockchain world that have popped up, and of varying quality. A good portion of blockchain-related content is situated on medium.com. Deeply technical teams release proofs of their cutting edge technology and their progress, but still have to routinely explain and justify what a blockchain is to everyone they come across, and so they cannot spend their time explaining why they are any better than the “other blockchains”. To tie this sentiment with an analogy, the blockchain world is another used car market — full of lemons, because we cannot distinguish a peach from a lemon.
How do we solve the lemons problem? The lemons problem is one of information asymmetry: people don’t have information about the systems, so they can’t make informed decisions. This leads to a market failure — peaches, or good technology, is passed up because we can’t distinguish them from lemons, or scams. The information asymmetry combined with the low barrier to entry for purchasing and participating in cryptocurrency, as well as perverse incentives for initial coin offerings, led to the bubble and subsequent bust in 2017.
Even now, in the blockchain ecosystem, the signal to noise ratio is so low — content writers and community moderators are employed to generate content and buzz about the blockchain systems they support, but there’s no easy metric to judge whether a blockchain is any better than another.
Before employing such technologies in our practice, we need understanding from use cases — we need to ground ourselves in our foundations. Ironically, despite the rallying cry of ‘trustlessness’ in the blockchain space, it’s more important now than ever that we rely on trusted parties to educate us as a populace about this new technology. As my colleague often says, in this space, credibility is the watchword.
Before I started ConsenSys Academy’s Blockchain: Foundations and Use Cases (the course) I didn’t know what a nonce was and neither did I know its purpose. I didn’t know as much as I did about public key cryptography. I understood what a hash function did, and the linked list data structure, but it didn’t help me put together potential applications for blockchain. I had bits and pieces of knowledge about private and permissioned blockchains, compared to public and permissionless blockchains from various sources, but I read a lot of articles ranging from (now defunct) “blockchains” shilling their solution to incredibly technical documents which I struggled to understand.
Taking up the course helped me focus on the technology and the foundations that mattered in order to understand what meaningful use cases can be architected using blockchain technology. I learnt about consensus mechanisms, interoperability, the difference between private, public and consortium blockchains, and the tradeoffs between centralisation and decentralisation.
But most importantly, I learned when to use a blockchain and the different use cases that may best feature them.
“By thinking about problems in this way and thinking about the decisions here, you can start to get a feel for whether or not a blockchain makes sense as the solution to a business problem. Feel free to refer back to this lesson when you consider case studies, problems, or business models that may or may not best benefit from a blockchain.”
In addition to providing their own tailor-made content, they linked well-written and researched articles that speak directly against hyping up blockchains. For example, as part of the same module on when to use a blockchain, a recommended reading was “Avoiding the pointless blockchain project” by MultiChain, which asserted that we should be very clear about ‘why we are using a blockchain’, and gave a very clear and valuable primer on when to use a blockchain.
Here’s how it plays out. Big company hears that blockchains are the next big thing. Big company finds some people internally who are interested in the subject. Big company gives them a budget and tells them to go do something blockchainy. Soon enough they come knocking on our door, waving dollar bills, asking us to help them think up a use case. Say what now?
A closing point: Maybe we won’t need blockchains in the vast majority of situations. Just as we don’t need everything to be internet-enabled (internet-enabled toothbrushes, anyone?) I suspect we’ll need a lot of meandering to get there — trying it in the legal industry, the energy industry, the supply chain industry. Some will take and some will not. But in the places we do need them, they’ll put in the work that the internet has done for various businesses everywhere. Just as we’ve meandered into E-commerce as a business model for the internet, in China (Alibaba), in Southeast Asia (Shopee), and in the United States (eBay). So for blockchains, let’s do the same. Let’s let’s find out where they can be useful, together. The space is still very new — in its infancy.
Perhaps we can start with education.