Dilbert gets it.

This post is cross-posted from the Bitwave blog.

For the last few years, I have been a blockchain skeptic. Well, that’s not entirely fair — I should say, I think cryptocurrencies and tokens are the killer app for blockchains, and we’re still looking around for that second great use case.

My skepticism came down to my computer science training — public permissionless blockchains with some form of consensus based proof (proof of work, proof of stake, etc) are designed to address a serious computer science problem called the Byzantine Generals Problems. The problem essentially asks how do you trust a whole system that relies on un-trustworthy components and actors? Contrary to the proliferation of blockchain applications and startups, there are really only certain situations where this is applicable, and as soon as you make your blockchain permissioned and start centrally granting trust, you’ve essentially fixed the very problem blockchains are supposed to solve.

It’s with that lense I’ve viewed most non-crypto blockchain projects over the past few years, and have generally been unconvinced that a distributed ledger is the right solution for most of them. Add in the fact that I always get nervous about a technology when IBM starts making ads for it (I’m still waiting for Watson to show up at my doctor’s office…) and you can see some of the issues I’m worried about.

I’ve come to realize that enterprise blockchains are less about a technical solution to a complex algorithmic problem, and more about a simple solution to a complex organizational problem

Recently, my thinking has started to shift. Not entirely, I still believe cryptocurrencies are the killer app for public blockchains, but I’m starting to see a new use for private blockchains that raise above theoretical computer science problems.

I’ve come to realize that enterprise blockchains are less about a technical solution to a complex algorithmic problem, and more about a simple solution to a complex organizational problem. Put simply, when multiple organizations are involved in any endeavor, there are only so many ways that they can interact to complete large technical projects, and all of those mechanisms are flawed. Maybe blockchains are the least flawed of them all.