Digital Ledger Technology (DLT) and blockchain technology has very much suffered a slower growth over the last year and a half. Here are a few reasons:
- Integration of DLT is expensive because the integration needs to be deep to be robust to failure.
- Given the depth of integration, the DLT owns much of the future, not the companies that integrate the DLT. This happens also with cloud and AI migrations, yet with blockchain this dependency is much more absolute. To alleviate this, DLT users may become partners in the DLT system, yet with additional risks and costs.
- Cryptocurrencies are killing the growth of broader DLT technology. In effect the equivalent of >200 billion $ of cryptocurrencies are digging their feet in the ground (1.7 trillion $ in March 2022), and all saying "not without me", with almost an infinite marketing budget to fight other forms of tokens that would cut them out, such as tokens of trustful processes.
- The cycle of innovation in blockchain is extremely fast because it is mostly just math, and math will progress, ensuring a quick obsolescence of each generation of blockchain technology. While obsolescence of technology is normal, blockchain is very much a space where theory progresses faster than implementation. And that is a tricky space to invest in.
Interestingly, in 2015, I founded a decently sophisticated DLT technology company (Elevence, then acquired by Digital Asset). I wanted to build a very formal, "pure thought" like, software company, with the goal of developing a smart contract product, and was lucky to hire a great team that delivered a blockchain based smart contract language in less than six months.
All original content copyright James Litsios, 2020.
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