Blockchain's primary use case remains the creation and movement of cryptocurrencies, said Bobby Lee, a board member of the Bitcoin Foundation and CEO of BTCC, at this year's Money20/20.
“I see a big difference between cryptocurrencies like bitcoin and then the blockchain effort. We all know that blockchain is fundamental to making crypto work.
“I have come to the sad realisation that, in order for blockchain to be truly unique and different than databases, there is a huge limitation with what you can do with blockchain.
“Some people say it’s okay that blockchain is similar to a database, yeah, well, that is like calling a dog, a cat.
“I urge you all to ask these critical questions and not just assume that blockchain can be used for all these real-world applications. As far as I’m concerned, I have yet to see a really compelling use case for real blockchain, other than cryptocurrencies,” said Lee.
Cryptocurrency consultant Jill Carlson also spoke of the hype that is being spread around the possible uses of blockchain technology.
“Any time you are making a technology decision you are making a trade-off. I think that’s important to bear in mind, especially given this word ‘blockchain’ gets used as a catch-all solution. Whether you are using a centralized database, a permissioned database, a permissioned blockchain, or a public cryptocurrency blockchain there are going to trade-offs there.
“There is this myth out there that all blockchains are going to speed up settlement and they are going to make them less costly, where in fact in most cases, in every case that I know of, they do the opposite. They slow it down and they’re highly costly.
Dave Maddox, US blockchain leader for IBM told the panel how IBM has built up a food trust network with Walmart, Carrefour and other companies in the food industry to allow them to improve visibility and accountability in the food supply chain. However, Lee was quick to state that this use of blockchain technology is nothing more than a database.
“So what you described David, the food sourcing blockchain, isn’t that just a database. I mean IBM is the inventor of the database. I love databases, IBM do a great job, but isn’t that just a database?” said Lee.
“Someone had to say at the beginning that this head of lettuce was grown on this ranch or this plot of land, and that information, unfortunately, is not publicly verifiable, at least all the rest of the world was not all there to view it," he said.
When Maddox responded that there is always going to be a need for trust at some point, Lee was quick to respond this would not be the case with true blockchain.
Qualifying IBM’s food trust network Maddox said: “Marsh has 95 companies, that have identified that this blockchain is going to save them 15 percent. That is what they have determined. That is 95 different CIOs that have looked at this technology and said…”
Lee interrupted: “That is 95 CIOs who don’t understand what blockchain means.”
“This is a great debate that goes on in the crypto space, which is whether or not this technology is suitable for non-natively digital assets,” interjected Carlson.
Clarifying his controversial stance on whether blockchain can have real-world applications, Lee said that the information that goes to the blockchain must be publicly verifiable.
“Everything in the real world, the measurement of it, it turns out is in some way subjective. Subjective data going to the blockchain is controversial because people may disagree,” said Lee.