Winning the 2015 Consensus Hackathon was a huge moment for Tierion. It helped our little startup get noticed. I was honored to return to this year’s hackathon as a judge.

At the beginning of this year’s event, each team presented their idea. I was surprised that most projects didn’t seem to require the Blockchain. After everyone finished, I went to the front of the room and issued a challenge. Email me your answer to the following question and I’ll award the best answer one Bitcoin:

“What is the Blockchain?”

Remarkably, I received dozens of responses. They ranged from “the messiah” to technically articulate answers that were copied verbatim from Wikipedia. A compilation of answers is listed at the bottom of this article. Here’s the winner.

“The Blockchain is a trust layer for the Internet”. - Lilia Vershinina of Distributed Lab

In less than ten words, Lilia succinctly described the fundamental innovation delivered by the Blockchain. Based on what I saw at the hackathon, I was tempted to give the award to the following answer.

“A blockchain is whatever you need it to be, what you want it to be, and what you demand it to be all at the same time.” - HiroJa Shibe

Through out the day, I kept asking myself “Why is this group of intelligent and motivated engineers fundamentally misunderstanding the Blockchain?”. I wasn’t alone. As the judging finished, the Founder of a well known startup grabbed me by the shoulders and remarked “What planet are we on?”. Fellow judge Muneeb Ali was compelled to write “Blockchains are not Magic”.

Something deep and troubling is going on here. Let’s see if we can get to the bottom of it. We’ll start by looking deeper into Lilia’s answer.

The Internet is a global network of computers that share information. It’s built on open protocols and open source software. There is no central authority. For the most part, you don’t need permission to use the Internet. However, running the Internet has costs, so we all have to pay for access.

The Blockchain is a global network of computers that allow you to exchange value without the need for trusted intermediaries. It’s based on open protocols and open source software. There is no central authority. Once transactions are confirmed by miners, they are added to an immutable record that contains the entire history of every Bitcoin transaction. The integrity of the data and the robust nature of the network is secured by mining. The cost of running the Blockchain is subsidized by mining rewards and transaction fees. This last point is critical. There is an economic incentive for people around the globe to participate in hosting the blockchain’s network infrastructure. This keeps the network running, available, and secure.

Companies such as Lightning Network, Blockstack, and Tierion build applications that interact with the Blockchain. We leverage the global nature of the Blockchain in the same way that Amazon, Facebook, and Google rely on the global Internet. We didn’t have to ask anyone for permission. We all use the Blockchain as a secure trust mechanism and settlement layer.

Lightning Network — global scalable payments

— global scalable payments Blockstack — global identity registry

— global identity registry Tierion — global data verification

A blockchain in a box is as useless to our customers as a website on a floppy disk. But, this is exactly what I saw from many entries at this year’s Consensus Hackathon. Several teams used private blockchains or Ethereum without regard to the technical constraints of each platform.

Blockchain Hype

We’re in the midst of a blockchain hype cycle. IBM Vice President of Blockchain Technologies Jerry Cuomo said it best, “If we call this project a blockchain, we’ll get funding”. Companies are creating application development stacks and calling them blockchains. It’s an easy way to get attention. I’m reminded of the early days of the Web when dozens of web development platforms such as Cold Fusion and IBM Websphere competed for market share.

There was a clear battle at the Consensus Hackathon for the winning team to use a sponsor’s technology platform. Some judges even suggested changes to the scoring mechanism to favor project’s that used their platform. Ultimately, we simply added up the scores and a team using IBM’s Hyperledger was victorious. The folks in the Ethereum camp we’re quick to proclaim another kind of victory. Andrew Keys of ConsenSys proudly posted on Twitter:

“At @coindesk @Consensus2016 hackathon: 2 @Bitcoin projects, 4 @IBM/@Hyperledger projects, 17 @ethereumproject projects.” - Andrew Keys of ConsenSys

Blockchains Aren’t Magic

Severals teams built projects that didn’t acknowledge the technical limitations of the underlying platforms. For example, one team pitched voting on Ethereum. A quick calculation showed that recording 5 million votes on Ethereum would monopolize 100% of the Ethereum network’s throughput for several days and cost a small fortune. It just isn’t a practical.

Blockchain Fever

Blockchain fever is a dangerous condition. Those afflicted can be seen at conferences proclaiming that the world’s software will soon be running on their blockchain. They are blinded by the technical constraints of their platform. Like the Borg, resistance is futile. We will soon blockchain all the things.

I’d like to see fewer grandiose promises and more companies releasing software that utilizes the Blockchain. Those of us who survived the dotcom boom, recognize that it’s dangerous to over-promise what a new generation of technology can deliver.

So, What is the Blockchain?

Congratulations to everyone who participated in the Consensus 2016 Hackathon. And thanks to Lilia Vershinina of Distributed Lab for her excellent answer to my “What is the Blockchain?” challenge. Here’s a compilation of a few answers. If you have a better definition, add it to the comments.

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