Is Blockchain Disruptive or Overhyped? Professional Investors Weigh InBy Jack Filiba
LongHash’s DLT Compass conference, which was held on June 6-7 in Singapore, centered on a question that is critical for the future of the blockchain industry. How do you make blockchain mainstream? The conference highlighted how enterprises could help promote real-world use cases for blockchain technology.
The “Blockchain’s Promise of Transformation and Disruption - Is It Coming?” discussion brought together industry players such as Liu Genping (Vertex Ventures), Victor Tan (SGInnovate), John Fiorelli (Kenetic Capital), and Remington Ong (Fenbushi Capital). Between them, they have invested in hundreds of tech projects — including blockchain technology. The conversation was moderated by LongHash’s co-founder, Emily Parker.
An underestimation of what blockchain can do
For years, we’ve heard that blockchain technology will present a much-needed disruption to many of the industries that shape our daily lives. At times, however, that promise can feel quite distant and perhaps even exaggerated. The speakers addressed just how disruptive blockchain technology could actually be.
“The analogy of blockchain being a trust machine is still very apt,” said Remington Ong. “We’ve clearly passed the height of expectations and I think right now we’re kind of at a trough of disillusionment. A lot of people are kind of feeling that there’s a lot of hype and that none of that hype is real, [that] blockchain can do nothing. There’s kind of an underestimation of what blockchain can do right now.”
According to Ong, who is a partner at the venture capital firm Fenbushi Capital (which is an investor in LongHash), Bitcoin has filled its potential of being able to create frictionless, cross-border value transfers. After all, the platform has been live and functioning for ten years. However, he believes that there is still a need for improvement when it comes to the user experience, as it is still “version one of the technology.”
“Blockchain is probably one of the few platforms that has fulfilled the promise it made,” added Kenetic Capital’s John Fiorelli. “When you think about blockchain, some of the finer points that you’re really interested in are decentralization, permissionlessness, trustlessness… and those qualities provide us a new way to interact with one another as humans. Whether that’s in the form of payments or in the form of making decisions together.”
Bitcoin is the example that has fulfilled its promise of disruption so far, Fiorelli said, though he believes other technologies are on their way to doing so. While disruption doesn’t necessarily mean that “mom and grandma and grandpa” have to be on board, Fiorelli believes at least an early majority have to be participating in some way for true disruption to occur.
The obstacles between blockchain and mass adoption
Blockchain technology can often be daunting to grasp for individuals who are not experts in the field. This dilemma means that when blockchain use cases such as decentralized finance (DeFi) emerge, they may not win over the general public right away. This could be an issue, as the panelists mentioned decentralized lending platforms such as MakerDAO as a key use case.
However, all four panelists expressed that the world at large does not necessarily need to understand the inner workings of blockchain technology. Consumers tend to flock to the inventions and platforms that benefit them. If a service improves their lives in some way or presents a profit opportunity, users may participate without even knowing that they are taking part in the blockchain movement.
The panelists agreed on other obstacles facing the industry, such as user experiences that are often less than ideal. Further, as an investor in blockchain projects, Liu Genping voiced his opinion that the industry may be overemphasizing infrastructure while neglecting to actually appeal to users.
“I’ve heard a lot of argument that currently there are not enough DApps (decentralized applications) on the market because the infrastructure is not ready,” Genping sad. “But I just feel that maybe we should [rather] think that we should have more DApps which really get user attention. Those DApps will drive infrastructure [...] instead of the other way around.”
On the enterprise side of things, everyone seemed to agree that adoption and disruption are on their way, but that it may be a long wait. SGInnovate’s Victor Tan expressed his personal belief that private blockchains are a way for enterprises to “get their toes wet” when it comes to embracing decentralization.
“For any existing organization to be able to accept blockchain as it is, it would require some form of control on their end,” said Tan. “It’s a long journey. Eventually when they understand the [technology’s] promise, maybe there are ways they can start to open up. This is just an essential first step.”
LongHash’s DLT Compass conference was held in Singapore from June 6 to June 7. Footage from the event will be available in the near future.