Is blockchain more hype than revolution?

27 Nov 2017

Members of the audience at the recent 4IRC debate voted on whether they felt blockchain was hyped up or revolutionary. Image: TechWatch

Is blockchain the next big thing? Not everyone is so convinced. TechWatch’s Emily McDaid reports on a recent 4IRC debate.

On 14 November, the Connect 4IRC team hosted a high-energy, sold-out debate called Blockchain: Hype or Revolution? Topics ranged from cryptocurrencies to ICOs, to ethereum’s failure, to privacy implications – and, indeed, it turned into a rousing forum.

First up was host Emer Maguire, who took a vote, finding that most participants felt that blockchain was more ‘revolution’ than ‘hype’. But would the audience opinion remain that way after hearing from the experts?

Maguire introduced Seamus Cushley of PwC, director of blockchain and digital, and one of Belfast’s leading experts on blockchain.

Blockchain is all about trust 

Cushley began: “Let’s look at the evolution of trust, and how we establish trust as people.”

He talked about how communities exchanged goods and services on the basis of knowing a person. Currencies needed to replace values to build a mechanism for trade. With the decentralisation of the internet, now trust is what comes into question.

“Look at Airbnb: the essence and the purpose of their being is about the establishment of trust – that’s an example of how trust has come to be represented in this decentralised world.”

Cushley talked about what the innovation of blockchain entails: “For the first time, we can replace third-party intermediaries with technology.”

He said: “Decentralised is a critical word – Visa is a fantastic example of a centralised tech network. If Visa were to rebuild today, they would retain their governance but replace their traditional structure with decentralised blockchain technology.”

Cushley discussed the the four broad lenses of blockchain:

  1. Bitcoin: Digital currency, eg ethereum. “They had a bad day today, we’ll talk about that later.”
  2. Digital assets: “Assets can be anything physical or digital.”
  3. Identity: Individual, corporate or machine. “Why? Because it’s a sharing technology, and identification of you as a person can be your digital ID.”
  4. Smart contracts: It’s the most sophisticated part of blockchain – what do they give us? They can eliminate the need for many manual processes at large organisations such as insurance companies. “Blockchain could fundamentally change their business model and open up completely new business markets.”

Cushley concluded: “What new business models does blockchain give us that didn’t previously exist? Critical infrastructure will be replaced by blockchain in healthcare, financial services, retail etc. The ability to exchange trust at a micro level within a peer-to-peer community – that’s where you can build new business models that weren’t possible before.”


Seamus Cushley, PwC. Image: TechWatch

Blockchain and e-voting

The next speaker was Dr Patrick McCorry, a PhD researcher exploring blockchain applications in voting. McCorry is a research associate at University College London, hailing originally from Northern Ireland.

“E-voting over a blockchain: is this hype, revolution or iterative? E-voting should give me the ability to vote and verify that my vote was part of the tally. We’re looking at end-to-end voter verifiable systems – where two people request data from a web server – and both people should be able to check that the system hasn’t cheated them.

“Can blockchain provide us with this consistency? I think, in theory, yes.

“If you look at ethereum, you can see everything that’s happened in the past. We explored many avenues to test this theory.

“There has been a lot of hype about using blockchain in public bulletin boards – for example, Follow My Vote, Public Vote, Evox, TMX Group. There are a lot of start-ups in e-voting.”

He continued: “Can we use something like bitcoin? Bitcoin isn’t a great public bulletin board. Every transaction can only store 80 bytes of data – and it can only store data, it can’t enforce the correct execution of the voting protocol. Ethereum is like a global computer that everyone has access to; it can store programmes and run programmes. It’s a bit like the computer from the 1970s.”

McCorry talked a lot about authority and why it’s a central construct. “Can we build a smart contract that can guarantee a voter’s privacy? There are a few ways of doing this. There’s something called the tallying authority that can grant authority. But I wanted no one to have authority, to give it total privacy.

“We experimented with how expensive is it to run a boardroom vote over blockchain. Each vote was about 80 cents so, for 40 people, it cost $36. For a national scale election, it would be way too expensive. My answer, right now, is no, we cannot use blockchain for a national election, because of scalability. At a rate of 864,000 transactions per day, 44m votes would take a month to process.”

McCorry continued: “Another technique we can use is permissioned blockchain. Permissioned blockchain is controlled by an authority where miners are appointed to maintain the blockchain. This can scale to handle millions of encrypted votes.”

However, it may still be expensive. McCorry’s final analysis:

  • Does blockchain solve voter coercion? No
  • Voter privacy? No
  • Does it solve ballot stuffing? No

“My conclusion for e-voting? I’d argue it only provides one small solution in a larger protocol. Is blockchain overhyped? It’s a complicated answer,” he said.

Iota is supposed to be crypto but it went offline and it still went up 14pc that day, so that means no one is looking at it. Ethereum wallets had $154m in coins deleted today, and no one can get their coins. Parity built a really complicated wallet and this is the second time it’s been broken.

He went on: “On the other hand, IBM is using software that’s 40 years old. It’s a great opportunity to change software and start afresh.”

McCorry made a final point: “WikiLeaks couldn’t get a bank account in 2011 and so they started taking their donations in bitcoin. Julian Assange tweeted to say they earned a 50,000pc return on all the money donated to them in bitcoin – so it was good they weren’t allowed to get a bank account.”


Patrick McCorry, UCL. Image: TechWatch

Blockchain to track the genesis of a bottle of whiskey

The next speaker was Brendan Smyth, COO of Arc-net, who has 25 years’ experience developing software innovations, 15 of which were for large financial institutions. Now, Smyth leads a blockchain start-up creating food traceability, detailed in my previous article here.

Smyth said: “Blockchain is about trust, traceability and transparency. Arc-net started three years ago – we’re not a blockchain company, we use it as part of our tech stack.”

He discussed how supply chains have gotten a lot more complicated, and used the case of a “tiramisu in Sainsbury’s that had thousands of food miles in its ingredients”.

He said: “Food fraud accounts for $40bn globally. Here are some examples: manuka honey, fish fraud, counterfeit alcohol, fipronil contamination in eggs that ended up in a lot of processed foods.”

Smyth stated: “More than £500 is spent annually per household in the UK on food that isn’t what it says it is.”

The solution? “Arc-Net can trace a bottle of whiskey from the barley in the fields to the bottle and label. We ID, track and trace food products – the platform gives immutability through the blockchain. It can scale from small producers to large.”


Panel debate. Image: TechWatch

The event concluded with a lively panel debate, based on questions from the audience. On the panel were Cushley; Smyth; McCorry; Dr Ciara Rafferty, lecturer at ECIT; Darshan Gadkari, a start-up blockchain entrepreneur; and Stephen Houston from Liberty IT.

How could blockchain reduce NHS cost?

Cushley: Medical records – patient could chose how to share their data records with a healthcare provider. Also, beds or equipment regulation inside hospitals – hospitals lack joined-up systems. Blockchain could transform tracking systems.

Houston: Counterargument? The NHS has wasted a lot of money on failed IT upgrades – they won’t implement blockchain. It’ll be a billion-pound project doomed to failure.

McCorry: Lots of people lose their cryptographic keys. If I went to hospital and didn’t have my key, does that mean I wouldn’t get treated?

Gadkari: There are a lot of other use cases though, such as information exchange between doctors and nurses.

What about privacy? For instance, in voting – a lot of people don’t vote. Are they kept private?

McCorry: When I vote, you shouldn’t be able to see that Patrick has cast his vote. You should only be able to see that a voting token has been spent, and that there is some encrypted value against that token. You still have to trust somebody to authenticate your token against your real-world identity but there are ways to make it double-blind.

Gadkari: You need to decide where you stop tracking stuff so you get the best of both worlds. In the case of Brendan’s bottle of whiskey, the tracking stops after it’s left Tesco.

Show of hands: A majority of people in the audience would be concerned with the privacy concerns of blockchain.

Will blockchain do a lot of people out of jobs?

Rafferty: Many will see it as a threat but it’s really an opportunity. It’s very important to consider the applications and their relevance to the blockchain. You have to think about whether blockchain is the best solution. I’m slightly on the ‘hype’ side. There are still a lot of questions to be answered, like privacy, and does blockchain actually improve customer experience?

Cushley: A broader context is, will robots take all our jobs? A really interesting point is where blockchain and robots converge together. As individuals, where should you look at career path? If your job is repetitive, it will be replaced. You need to be where humans augment the robots or machines.

Gadkari: Any time a new tech is created, everyone asks if it will result in lost jobs. There are jobs created if you embrace it; you might create new jobs if you embrace it. I think things will work out if you think positively about it.

Banks are dealing with tech that’s 40 years old, and some of the banks nearly crashed 10 years ago. Are some of them using blockchain? Will it revolutionise the banks in the next two to three years?

Cushley: It’s all about innovation – how do large-scale companies think like a start-up and act like a start-up? Tech is about mindset. Take a look at Monzo bank – it’s an interesting consumer experience.

McCorry: If you look at the history of bitcoin, the banks would shut down your account 10 years ago if you used it because they thought it was used for selling drugs. Banks were being outcompeted by bitcoin in doing cross-border transactions. The banks want to do this as well but they need compliance. They aren’t allowed to send payments without KYC (know your customer) checks.

Gadkari: Another example is Ripple, which is accepted by most banks and that’s a cryptocurrency. At some point, all banks will have to join the programme. Some banks are pushing it as an alternative asset. It’s not a question of if, it’s a question of when.

Houston: Ethereum is the second largest cryptocurrency after bitcoin. It’s not actually two parties that are required for trust, it’s the two parties on either side but also the code. You have to trust the code.

Cushley: A smart contract is not a legal contract. Ethereum is experimenting in the open but you should experiment with $15, not with $150m. Currency in its very essence is a faith system.

How long before blockchain is going to be normal?

Rafferty: A good question. We definitely need the bugs to be ironed out before we invest millions in it. It will be a minimum 10 years in my view before it’s rolled out on a grand scale.

Will organisations share more information? Will they work like that?

Houston: Yes, because they’ll need to.

How does blockchain tie in with the future of work? Will we all have employees, be self-employed?

Cushley: There’s a bigger trend to community-driven work.

Smyth: I take issue with the gig economy. I think Uber is an evil company. We need to make sure we don’t hurt each other in the gig economy.

Rafferty: Legal frameworks won’t shift overnight and getting all the parties to talk to each other takes time.

Houston: Don’t invest in any ICO! If you take one thing away from tonight, take that away.

Cushley: However, $75m in ICO funds raised have been found to be valid. Like anything, only place your bets where you can afford to lose your bets.

Houston: I still want to answer the question. It can be a trusted escrow. If I put 20 tokens in Michael’s account to mow my lawn, then I can only authorise that payment once I see that he has mowed it, or I can take the tokens back if he doesn’t do the job.

Gadkari: Think about where we as humans were a few thousand years ago. We weren’t working for corporations. I think the ratio of self-employed versus employees working for corporations will go way up. Uber, whether you like it or not, have changed the direction. Everything is global but laws are local and country-based. We are all restricted by the laws of the land but trying to make money globally. People are going to have to be creative about how to make money and how to find work.

Has audience opinion changed? Nearly twice as many audience members displayed ‘hype’ rather than ‘revolution’ compared to the first time.

Catch the next 4IRC event in Derry on 12 December: Government and Society: Is There an Algorithm for Good Government?

By Emily McDaid, editor, TechWatch

This article originally appeared as two posts on TechWatch, which can be found here and here

TechWatch by Catalyst covered tech developments in Northern Ireland