An interesting article in Fortune’s excellent “Term Sheet” column got me thinking a bit about Blockchain and a few startups I’ve consulted with along with the nature of the technology itself. The main problem is, Blockchain has a visibility problem. In that it is largely invisible. And the results of what it can do at one end present transparency challenges for those who prefer opacity and at the other end, are harder to “touch.”
The Physical Versus Invisible in Technology
Until the last decade or so, about 99.5% of technology has always been quite visual to us. Also until recently, about 90% of technology has been about augmenting our bodies (axes, hammers, saws, bulldozers etc.) We are now moving into a phase where emerging technologies such as Artificial Intelligence and Blockchain, are much more invisible. They work behind the scenes to perform cognitive and transactional tasks. Actions we don’t really see and in many cases, only indirectly get feedback from. And feedback is a key word. Humans are highly visual and we use visual cues to understand action and reaction…what’s that term? Every action has a reaction?
When one hammers a nail, it goes in and secures one thing to another. When I bulldoze a pile of dirt (something I’ve always wanted to do…) I see a structure collapsing or a pile of dirt being made. The feedback is that I’ve accomplished a goal. We don’t really see that with chatbots, AI systems and especially, blockchain.
Blockchain is Harder to Trust
While I believe that blockchain can have profoundly good and important impacts on today’s society, it has a feedback loop problem. Blockchain inherently works behind the scenes for almost everything it does. When it comes to cryptocurrency, yes, it can have a more immediate result and fulfill a feedback loop. But for many other applications, such as real-estate and business contracts, it’s harder for humans to comprehend what has happened and thus it is harder to trust. Even though it is more trustworthy than many other technologies.
The Investor Problem
While there are a number of VC’s and others who will invest in blockchain, many VC’s and investors want to put their money into technologies that provide greater feedback visibility. Blockchain might secure health contracts with doctors and pharmaceuticals, but it isn’t of much appeal to news media and the greater public. Have an app that you can create amazing visuals around for measuring heart rate and blood sugar levels, well, that attracts media attention and is more easily explained to consumers than blockchain contracts.
This creates a problem for startups who are trying to leverage blockchain with a less visual end product. I’m not saying a blockchain must have a highly visual and media friendly aspect, it’s just the feedback loop conundrum and it’s an obstacle for blockchain technology. Good technology that truly solves a problem will work and find investment most of the time. But blockchain startups outside of FinTech have an extra hurdle from a more visual technology that provides faster feedback.
What are your thoughts and experiences?