Source: iStock/lucky336

Even if the USD 13.7 billion earnings figure reported for initial coin offerings (ICOs) this year shows that public interest in ICOs hasn't quite yet died down, signs have recently been emerging of a low-level backlash against promises that blockchains and tokenization are going to make the world a simpler, more efficient place.

At the Distributed blockchain conference in July, a number of speakers railed against unrealistic hype. Hyperledger's Brian Behlendorf declared, "Blockchains are not a faster way to do anything,” while Oracle's Emmanuel Abiodun argued that tokenization isn't solving any fundamental problems and is "actually creating a more complex society than I can envisage.”

But while their concerns about the indiscriminate application of blockchains are well founded, there are constructive use cases for blockchains in certain clearly specified sectors, as argued by other figures within the blockchain industry.

Interoperability and a focus on finance

"Any industry which goes through rapid expansion as it opens up to new possibilities, goes through a phase when numerous players dive into the market with the hope of making it big without adequately researching on the industry."

Sankalp Shangari is the founder and CEO at LALA World, a Singapore-based startup that's building a global decentralized financial ecosystem focused on the un- and underbanked. He agrees that there's currently a glut of companies promising too much, but as he tells Cryptonews.com, he's confident that a process of natural selection will bring the most valuable projects to the fore.

"After the initial boom, the market eventually settles with the most persistent players who get the basics right and deliver with a superior infrastructure to enable tokenization."

Not only does he expect the industry to crystallize around a few dominant players, but he expects that tokenization will become simpler as soon as standards and platforms for blockchain interoperability – being worked on by the likes of Cosmos, Polkadot, and ICON – are realized.

"I would say that the interoperability of tokenized systems and tokens will essentially make systems simpler and easier to comprehend."

And more importantly, there are blockchain-based systems – particularly in the area of finance – that will provide real benefits for people, largely as a result of harnessing crypto's lack of borders and its cost-effectiveness.

"When it comes to developing economies, I can foresee that digitized money will bring the underbanked under financial inclusion," he says. "The ease of access to finance and related services will enable the creation of inclusive economies."

Needles in haystacks and driverless convoys

Gavin Brown knows a thing or two about cryptocurrencies and blockchains, being the director and co-founder of hedge fund Blockchain Capital, as well as a lecturer in finance and cryptocurrencies at Manchester Metropolitan University.

"I think the thing for me is," he tells Cryptonews.com, "when you look at the actual coins themselves, of the 1,600 [or so currently in existence], about a third are trying to be money or money replacement, so they're effectively trying to be Bitcoin 2.0."

Given this profusion of coins, Brown acknowledges that a process of speculation, experimentation and uncertainty will be required before a "dominant design" appears.

"In other words, you're trying to pick out a needle in a haystack […] So for me that becomes highly speculative in terms of trying to decide which one that's going to be."

And as common as 'blockchains for x' may now be, Brown affirms that some non-money blockchains are likely to have considerable utility.

"The classic example I would give is the IOTA one," he says. "One of the things that IOTA can do is that it can work as a means of transferring information to allow route planners to enable trucks and lorries to come together into platoons, because you save 20% of fuel."

In the past, the forming of convoys presented a classic 'free rider' problem, in that drivers would always be incentivized to follow rather than lead a platoon, since the lead truck wouldn't share in the 20% reduction in fuel costs. "But in terms of the way the IOTA network works, micro-payments will be made by every truck that's benefitting in the platoon to the lead truck in real-time."

Here, therefore, is one example of a blockchain-based platform providing genuine benefits and solving a fundamental problem. And even though naysayers could argue that the tech underlying such platforms as IOTA is still too 'complex' for people to understand, Brown concludes with the observation that popular technologies aren’t understood by most of those who use them.

"Say my mum goes to buy coffee," he says. "When she pays by card, she doesn't understand the complexities of the Visa system, she doesn't understand how settlement occurs and how the transaction is verified between each party, [but] she doesn't have to."