Matt Higginson, Marie-Claude Nadeau, and Kausik Rajgopal write:

Given the lack of convincing at-scale use cases and the industry’s seemingly becalmed position in the industry lifecycle, there are reasonable questions to ask about blockchain’s future. Is it really going to revolutionize transaction processing and lead to material cost reductions and efficiency gains? Are there benefits to be accrued that justify the changes required in market infrastructure and data governance? Or is a secure distributed ledger primarily just one option when contemplating possible replacements for legacy infrastructure?

Certainly, there is a growing sense that blockchain is a poorly understood (and somewhat clunky) solution in search of a problem. The perspective is exacerbated by short-term expense pressures, cultural resistance in some quarters (blockchains may threaten jobs), and concern over disruption to healthy revenue streams. There are challenges in respect of governance—making decisions in a decentralized environment is never easy, especially when accountability is equally decentralized. And there are technical impediments, for example in respect to blockchains’ data storage capacity.

[…]

An emerging perspective is that the application of blockchain can be most valuable when it democratizes data access, enables collaboration, and solves specific pain points. Certainly, it brings benefits where it shifts ownership from corporations to consumers, sharing “proof” of supply-chain provenance more vertically, and enabling transparency and automation. Our suspicion is that it will be these species of uses cases, rather than those in financial services, that will eventually demonstrate the most value.

There are really two starkly different camps in the blockchain debate. On the one side are the unrestrained proponents, who tend to either not understand blockchain as a technology or do not understand the end markets in which blockchain is being deployed (e.g., how screwed up bank back-office technology and workflows really are). On the other side are the unrestrained skeptics, who tend to believe that all of blockchain is hype (in large part, I suspect, because the proponents use blockchain for pretty silly use cases).

Against all this, Higginson et al. propose three conditions to evaluate the usefulness of blockchain:

• Start with a problem (Occam’s razor)
• Have a clear business case and target ROI
• Commit to a path to adoption

It is not as sexy as “blockchain solves everything” and does not access the self-righteous snobbery that comes with “blockchain solves nothing,” but it seems like a pretty reasonable middle ground.