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I've been working on DLT / enterprise blockchain technologies since 2014 and have insight into hundreds of projects, a small number of which made it to live pro

I've been working on DLT / enterprise blockchain technologies since 2014 and have insight into hundreds of projects, a small number of which made it to live production. Here is the bottom line: yes, it's mostly hype, but this technology does have genuine use cases - when you want to build an interparty database-driven application, and cannot find a suitable place to put the database, because of business concerns or regulation. This is fairly niche, perhaps 1% of all interorganizational database applications, but there are certainly cases where it is the right solution. The majority of blockchain projects undertaken still do not make sense, but this is gradually getting better over time.

ellius 8y ago
I've only worked on a single blockchain application, but this was my experience too. I was actually pretty skeptical when I was told we'd be working on it and figured it was just a hype thing, but the use case involved a B2B process that was well-established and used a paid intermediary to correlate data across businesses. We were pretty happy with the result. I doubt we'll ever see a middleman-free decentralized utopia, but I agree that it's a technology with some genuine applications.
- davidgerard 8y ago
  What was it and where? If what you're saying is true, then this is noteworthy and I'd love to look more closely at the details.
  - m-i-l 8y ago
    The source for the article's "Blockchain study finds 0.00% success rate" headline is "We documented 43 blockchain use-cases through internet searches ... we found no documentation or evidence of the results blockchain was purported to have achieved"[0]. That isn't a huge sample size, and "internet searches" may have skewed the results towards the more dubious projects spending large amounts on SEO. But never-the-less I'd echo the interest in reading details of a successfully implemented use-case for public blockchain technology, beyond cryptocurrencies. Based on some of the comments here hinting that there might be some, and assuming they do indeed exist, I suspect that they are not solutions that could be achieved only with blockchain technology (like cryptocurrencies), or even solutions that are significantly better (in terms of cost, effort, time to market or some other metric) with blockchain technology, but simply solutions where blockchain has been made to work (i.e. other approaches could have been too and some of those may have been as good if not better). [0] http://merltech.org/blockchain-for-international-development-using-a-learning-agenda-to-address-knowledge-gaps/ http://merltech.org/blockchain-for-international-development...
JumpCrisscross 8y ago
> when you want to build an interparty database-driven application, and cannot find a suitable place to put the database, because of business concerns or regulation If you're operating a legal business, a centralized database hosted by an industry mutual or regulator beats a blockchain.
- manmanic 8y ago
  Yes, that's true. But in some cases an industry mutual doesn't exist, and the regulator doesn't want to manage the database. Then what? It can be cheaper and easier to deploy a blockchain than to build the necessary organizational structure to run a central database. Like I said, it's niche but it happens.
  - JumpCrisscross 8y ago
    > in some cases an industry mutual doesn't exist, and the regulator doesn't want to manage the database. Then what? If you're at the scale where broad co-ordination is a problem, you're at the scale where the big boys can arrange a meeting. Alternatively, if you're at a scale where someone can get everyone on a blockchain, you're at the scale to create an industry organization.
    - manmanic 8y ago
      I'm sorry but this does not always apply in the real world. Someone getting everyone onto a blockchain is a one-time project, perhaps with an annual maintenance fee. Running an industry organization is an order of magnitude (or two) more expensive. Trusting someone to build an (open source) application is not the same as trusting them to centrally host it.
      - wmf 8y ago
        Every successful cryptocurrency has had protocol upgrades which require governance and I imagine private blockchains will be similar. You can't just let it run. So if you have an industry organization to perform ongoing governance of the blockchain then it is probably cheaper to have that organization run a database.
brianbreslin 8y ago
I've always seen it as the following equation: is the cost of distrusting the other parties in the transaction lower than the cost of running a decentralized ledger? if yes, you shouldn't use blockchain. this is obviously oversimplification but i think you get my point.
rayvy 8y ago
Yea sometimes I believe the word "enterprise blockchain" makes about as much since as a "dry rain". Basically saying that the problems that blockchain solves are usually not problems that enterprises run into often, or can't solve using some readily available alternative (e.g., SQL). Blockchain clearly satisfies a need. It's just that the great majority of enterprises clearly don't have that need.
hn_throwaway_99 8y ago
Can you let me know how these "private" blockchains utilize proof of X to determine consensus? E.g. proof of work, or proof of stake, or something else? The thing I never understood with private blockchain tech is that the "traditional" blockchain (i.e. Bitcoin) relies on proof of work, and the only way this is viable is to have tons of resources working on these proofs so that you don't get a 51% attack (there have even been a bunch of articles about how smaller coins actually are very susceptible to a 51% attack by a decently funded attacker). For a private blockchain, though, it never made sense to me as to who would serve the role of the miners with sufficient incentive to prevent a nefarious attacker. If on the other hand you are in a system where the participants agree as to how they will trust each other, well then you'd be back to a situation where the byzantine model isn't really necessary and you can just go back to a cryptographically signed ledger a la the Quantum Ledger DB that AWS just announced. Would really appreciate someone explaining this one to me!
- manmanic 8y ago
  There are a variety of formal consensus algorithms uses for enterprise blockchains, but they are all some variant of voting schemes based on validator signatures. Nothing like proof-of-work is needed to ensure that one bad actor, or a small number of bad actors, cannot break the network's consensus. If you have just one validator, like QLDB, then you're back to a centralized scenario.
  - wslh 8y ago
    The problem is that having a non-BFT consensus is the same that using database nodes and if you use BFT consensus you don't have the performance required for most use cases. BFT-SMaRT supposely achieve 80k tps for a few nodes but when you scale to more nodes the performance degrades substantially. Another issue against the DLT hype is that the blockchain does not provide security where 90% of the whole architecture is outside the blockchain, less if there are many few nodes.
    - dlubarov 8y ago
      There might be some constant factor penalty, but we can shard BFT systems much like we do with Paxos etc. See Shasper for example -- it won't have any practical limits on throughput.
Alex3917 8y ago
> This is fairly niche, perhaps 1% of all interorganizational database applications, but there are certainly cases where it is the right solution. So I personally think DLT is going to be one of those multi-quadrillion dollar technologies that come around every few hundred years. The real benefit of DLT is that it enables new types of human relationships. So thinking about it in terms of what percentage of your existing databases should be replaced by it isn't going to give an especially impressive result, because by definition your existing databases are going to model your existing relationships. Think about what percentage of the stuff in your house you would own without the invention of double entry accounting. Unless you happen to have some veggies from the farmer's market or a sweater one of your relatives knit you, the answer is probably 0.00%. It simply isn't possible to manufacture things like the iPhone without double entry accounting, because without double entry it would be impossible to form the sorts of human relationships needed to produce such a complex product. And if we asked someone to take a look at all the stuff in their house a couple hundred years from now, I'm guessing that a similar 0.00 percentage of the stuff they own will have not have been created as the result of DLT. The fact is that once DLT becomes ubiquitous it will no longer be cost competitive to manufacture and distribute products using only the sorts of relationships and techniques enabled by double entry accounting. And if anyone even tries it's going to be like bringing a knife to a gunfight.
- Jakawao 8y ago
  I can’t tell if you are being sarcastic or not, so I assume this is a serious comment. Can you share some examples of use cases where DLT is going to be transformative?
  - Alex3917 8y ago
    I mean a good example of the need for DLT is the fact that no one in the country can buy romaine lettuce right now. Does it really make any sense whatsoever that no one in the country can eat lettuce for the next couple months just because one farm got contaminated with E. coli?
    - 8y ago
darawk 8y ago
Yep, i've been trying to explain this to people on here for quite a while now. This is correct. Blockchains allow data and co-operation to be domiciled nowhere, which allows competitive actors to agree and co-operate. It also enables otherwise untrusted actors to make trustable claims, bypassing the gatekeepers that would otherwise have mediated those claims. One tangible example is ICOs bypassing not just regulators, but banks and the financial industry that would normally have had to underwrite them. Obviously this particular example has some serious kinks to work out, but the ability to bypass the corporate gatekeepers (not so much the regulators) has value, I think.
narrator 8y ago
The only successful applications of business blockchain I've seen is in businesses where nobody trusts the brokers. For example, the diamond business has to keep track of where the diamonds came from and nobody trusts the brokers to not lie, so blockchain works here.
- fwip 8y ago
  How does the blockchain keep brokers from lying?
  - plokiju 8y ago
    Maybe you trust the source, but not the broker?
    - dlubarov 8y ago
      Exactly - if the diamond mines are honest then you don't really need to trust the middlemen. You could also see how many diamonds a certain mine was claiming to produce, and if that number seemed disproportionate to the size of the mine, people might stop treating diamonds coming from that mine.
- AndrewKemendo 8y ago
  I've never encountered a system where an un-trusted middleman didn't get out-competed, driven out by the buyers or (in one case) actually killed. Hasidim don't seem like they have that problem.
obtino 8y ago
Wasn’t this type of stuff around well before the hype of the blockchain? E.g distributed hash tables?
maxxxxx 8y ago
Sounds a little like the NoSQL trend where everybody jumped on it only to find out that NoSQL is only applicable for a few use cases.
- nihil75 8y ago
  what?!?!? I hope that's sarcasm.
  - deleted 8y ago
    [deleted]
  - maxxxxx 8y ago
    Not really. A few years ago there was a lot of hype around NoSQL and everybody wanted to jump on it only to find out that in many cases NoSQL didn't make anything better.
    - nihil75 8y ago
      Yes I guess developers never really took to MongoDB, Memcache, Redis and such. Not to mention object stores like Amazon S3 which are also a kind of NoSQL database and are totally useless.
- autokad 8y ago
  I dont use NoSQL that much, but I also dont use relational databases much either. most of my work is in pyspark / spark on top of s3.
Demigod33 8y ago
https://m.imgur.com/a/RlUj9Ed https://m.imgur.com/a/RlUj9Ed Is NIST correct?
AndrewKemendo 8y ago
when you want to build an interparty database-driven application, and cannot find a suitable place to put the database, because of business concerns or regulation Technology can't solve this problem. If multiple entities need to coordinate inside a mutually used product don't trust each other, then the problem is structural and needs to be solved with interpersonal, regulatory or political action.
- marssaxman 8y ago
  Annnnd... if you have a structural problem which cannot be corrected via interpersonal, regulatory, or political action, then what do you do?
  - AndrewKemendo 8y ago
    Quit and start over, or move. That's why people migrate between countries or quit jobs.
    - marssaxman 8y ago
      Ah, if only it were that simple.
      - AndrewKemendo 8y ago
        No need to be glib. The kinds of situations that are being discussed as the best for blockchain are literally the most intractable - hence why I said it was not a technology solution. If you're in a situation where cryptocurrency is the best solution for currency, then you're probably in a lawless wasteland with abjectly destructive governance systems. Seems like in that circumstance moving is the right answer.
        marssaxman 8y ago
        I'm not being glib, I'm observing that the global system of passports and visa controls makes "moving" nearly impossible. I nearly pulled it off just over twenty years ago, but I failed, and now I'm permanently stuck back "home". Cryptocurrencies won't help, they're just another way to do capitalism.
6nf 8y ago
So can you help the authors of this article with their quest to find any success stories at all?

ellius 8y ago

I've only worked on a single blockchain application, but this was my experience too. I was actually pretty skeptical when I was told we'd be working on it and figured it was just a hype thing, but the use case involved a B2B process that was well-established and used a paid intermediary to correlate data across businesses. We were pretty happy with the result. I doubt we'll ever see a middleman-free decentralized utopia, but I agree that it's a technology with some genuine applications.

davidgerard 8y ago
What was it and where? If what you're saying is true, then this is noteworthy and I'd love to look more closely at the details.
- m-i-l 8y ago
  The source for the article's "Blockchain study finds 0.00% success rate" headline is "We documented 43 blockchain use-cases through internet searches ... we found no documentation or evidence of the results blockchain was purported to have achieved"[0]. That isn't a huge sample size, and "internet searches" may have skewed the results towards the more dubious projects spending large amounts on SEO. But never-the-less I'd echo the interest in reading details of a successfully implemented use-case for public blockchain technology, beyond cryptocurrencies. Based on some of the comments here hinting that there might be some, and assuming they do indeed exist, I suspect that they are not solutions that could be achieved only with blockchain technology (like cryptocurrencies), or even solutions that are significantly better (in terms of cost, effort, time to market or some other metric) with blockchain technology, but simply solutions where blockchain has been made to work (i.e. other approaches could have been too and some of those may have been as good if not better). [0] http://merltech.org/blockchain-for-international-development-using-a-learning-agenda-to-address-knowledge-gaps/ http://merltech.org/blockchain-for-international-development...

JumpCrisscross 8y ago

> when you want to build an interparty database-driven application, and cannot find a suitable place to put the database, because of business concerns or regulation If you're operating a legal business, a centralized database hosted by an industry mutual or regulator beats a blockchain.

manmanic 8y ago
Yes, that's true. But in some cases an industry mutual doesn't exist, and the regulator doesn't want to manage the database. Then what? It can be cheaper and easier to deploy a blockchain than to build the necessary organizational structure to run a central database. Like I said, it's niche but it happens.
- JumpCrisscross 8y ago
  > in some cases an industry mutual doesn't exist, and the regulator doesn't want to manage the database. Then what? If you're at the scale where broad co-ordination is a problem, you're at the scale where the big boys can arrange a meeting. Alternatively, if you're at a scale where someone can get everyone on a blockchain, you're at the scale to create an industry organization.
  - manmanic 8y ago
    I'm sorry but this does not always apply in the real world. Someone getting everyone onto a blockchain is a one-time project, perhaps with an annual maintenance fee. Running an industry organization is an order of magnitude (or two) more expensive. Trusting someone to build an (open source) application is not the same as trusting them to centrally host it.
    - wmf 8y ago
      Every successful cryptocurrency has had protocol upgrades which require governance and I imagine private blockchains will be similar. You can't just let it run. So if you have an industry organization to perform ongoing governance of the blockchain then it is probably cheaper to have that organization run a database.

brianbreslin 8y ago

I've always seen it as the following equation: is the cost of distrusting the other parties in the transaction lower than the cost of running a decentralized ledger? if yes, you shouldn't use blockchain. this is obviously oversimplification but i think you get my point.

rayvy 8y ago

Yea sometimes I believe the word "enterprise blockchain" makes about as much since as a "dry rain". Basically saying that the problems that blockchain solves are usually not problems that enterprises run into often, or can't solve using some readily available alternative (e.g., SQL). Blockchain clearly satisfies a need. It's just that the great majority of enterprises clearly don't have that need.

hn_throwaway_99 8y ago

Can you let me know how these "private" blockchains utilize proof of X to determine consensus? E.g. proof of work, or proof of stake, or something else? The thing I never understood with private blockchain tech is that the "traditional" blockchain (i.e. Bitcoin) relies on proof of work, and the only way this is viable is to have tons of resources working on these proofs so that you don't get a 51% attack (there have even been a bunch of articles about how smaller coins actually are very susceptible to a 51% attack by a decently funded attacker). For a private blockchain, though, it never made sense to me as to who would serve the role of the miners with sufficient incentive to prevent a nefarious attacker. If on the other hand you are in a system where the participants agree as to how they will trust each other, well then you'd be back to a situation where the byzantine model isn't really necessary and you can just go back to a cryptographically signed ledger a la the Quantum Ledger DB that AWS just announced. Would really appreciate someone explaining this one to me!

manmanic 8y ago
There are a variety of formal consensus algorithms uses for enterprise blockchains, but they are all some variant of voting schemes based on validator signatures. Nothing like proof-of-work is needed to ensure that one bad actor, or a small number of bad actors, cannot break the network's consensus. If you have just one validator, like QLDB, then you're back to a centralized scenario.
- wslh 8y ago
  The problem is that having a non-BFT consensus is the same that using database nodes and if you use BFT consensus you don't have the performance required for most use cases. BFT-SMaRT supposely achieve 80k tps for a few nodes but when you scale to more nodes the performance degrades substantially. Another issue against the DLT hype is that the blockchain does not provide security where 90% of the whole architecture is outside the blockchain, less if there are many few nodes.
  - dlubarov 8y ago
    There might be some constant factor penalty, but we can shard BFT systems much like we do with Paxos etc. See Shasper for example -- it won't have any practical limits on throughput.

Alex3917 8y ago

> This is fairly niche, perhaps 1% of all interorganizational database applications, but there are certainly cases where it is the right solution. So I personally think DLT is going to be one of those multi-quadrillion dollar technologies that come around every few hundred years. The real benefit of DLT is that it enables new types of human relationships. So thinking about it in terms of what percentage of your existing databases should be replaced by it isn't going to give an especially impressive result, because by definition your existing databases are going to model your existing relationships. Think about what percentage of the stuff in your house you would own without the invention of double entry accounting. Unless you happen to have some veggies from the farmer's market or a sweater one of your relatives knit you, the answer is probably 0.00%. It simply isn't possible to manufacture things like the iPhone without double entry accounting, because without double entry it would be impossible to form the sorts of human relationships needed to produce such a complex product. And if we asked someone to take a look at all the stuff in their house a couple hundred years from now, I'm guessing that a similar 0.00 percentage of the stuff they own will have not have been created as the result of DLT. The fact is that once DLT becomes ubiquitous it will no longer be cost competitive to manufacture and distribute products using only the sorts of relationships and techniques enabled by double entry accounting. And if anyone even tries it's going to be like bringing a knife to a gunfight.

Jakawao 8y ago
I can’t tell if you are being sarcastic or not, so I assume this is a serious comment. Can you share some examples of use cases where DLT is going to be transformative?
- Alex3917 8y ago
  I mean a good example of the need for DLT is the fact that no one in the country can buy romaine lettuce right now. Does it really make any sense whatsoever that no one in the country can eat lettuce for the next couple months just because one farm got contaminated with E. coli?
  - 8y ago

darawk 8y ago

Yep, i've been trying to explain this to people on here for quite a while now. This is correct. Blockchains allow data and co-operation to be domiciled nowhere, which allows competitive actors to agree and co-operate. It also enables otherwise untrusted actors to make trustable claims, bypassing the gatekeepers that would otherwise have mediated those claims. One tangible example is ICOs bypassing not just regulators, but banks and the financial industry that would normally have had to underwrite them. Obviously this particular example has some serious kinks to work out, but the ability to bypass the corporate gatekeepers (not so much the regulators) has value, I think.

narrator 8y ago

The only successful applications of business blockchain I've seen is in businesses where nobody trusts the brokers. For example, the diamond business has to keep track of where the diamonds came from and nobody trusts the brokers to not lie, so blockchain works here.

fwip 8y ago
How does the blockchain keep brokers from lying?
- plokiju 8y ago
  Maybe you trust the source, but not the broker?
  - dlubarov 8y ago
    Exactly - if the diamond mines are honest then you don't really need to trust the middlemen. You could also see how many diamonds a certain mine was claiming to produce, and if that number seemed disproportionate to the size of the mine, people might stop treating diamonds coming from that mine.
AndrewKemendo 8y ago
I've never encountered a system where an un-trusted middleman didn't get out-competed, driven out by the buyers or (in one case) actually killed. Hasidim don't seem like they have that problem.

obtino 8y ago

Wasn’t this type of stuff around well before the hype of the blockchain? E.g distributed hash tables?

maxxxxx 8y ago

Sounds a little like the NoSQL trend where everybody jumped on it only to find out that NoSQL is only applicable for a few use cases.

nihil75 8y ago
what?!?!? I hope that's sarcasm.
- deleted 8y ago
  [deleted]
- maxxxxx 8y ago
  Not really. A few years ago there was a lot of hype around NoSQL and everybody wanted to jump on it only to find out that in many cases NoSQL didn't make anything better.
  - nihil75 8y ago
    Yes I guess developers never really took to MongoDB, Memcache, Redis and such. Not to mention object stores like Amazon S3 which are also a kind of NoSQL database and are totally useless.
autokad 8y ago
I dont use NoSQL that much, but I also dont use relational databases much either. most of my work is in pyspark / spark on top of s3.

Demigod33 8y ago

https://m.imgur.com/a/RlUj9Ed https://m.imgur.com/a/RlUj9Ed Is NIST correct?

AndrewKemendo 8y ago

when you want to build an interparty database-driven application, and cannot find a suitable place to put the database, because of business concerns or regulation Technology can't solve this problem. If multiple entities need to coordinate inside a mutually used product don't trust each other, then the problem is structural and needs to be solved with interpersonal, regulatory or political action.

marssaxman 8y ago
Annnnd... if you have a structural problem which cannot be corrected via interpersonal, regulatory, or political action, then what do you do?
- AndrewKemendo 8y ago
  Quit and start over, or move. That's why people migrate between countries or quit jobs.
  - marssaxman 8y ago
    Ah, if only it were that simple.
    - AndrewKemendo 8y ago
      No need to be glib. The kinds of situations that are being discussed as the best for blockchain are literally the most intractable - hence why I said it was not a technology solution. If you're in a situation where cryptocurrency is the best solution for currency, then you're probably in a lawless wasteland with abjectly destructive governance systems. Seems like in that circumstance moving is the right answer.
      - marssaxman 8y ago
        I'm not being glib, I'm observing that the global system of passports and visa controls makes "moving" nearly impossible. I nearly pulled it off just over twenty years ago, but I failed, and now I'm permanently stuck back "home". Cryptocurrencies won't help, they're just another way to do capitalism.

6nf 8y ago

So can you help the authors of this article with their quest to find any success stories at all?