Blockchains, from Andy Aiken

September 28, 2017 |

 To limit it to three major concerns, I suggest:

1. Having a significant number of blockchain apps come to market with a viable product

There are some already in production, such as OmiseGo and StatusIM. But more will need to succeed in the marketplace for this to be a fertile area of fintech development.

Some projects to watch are Augur (Ethereum-based), Golem (Ethereum), Gnosis (Ethereum), Factom (Bitcoin), Civic (Bitcoin), Air (Bitcoin)

There is a fundamental question of the viability of these projects as businesses. Undoubtedly, many will fail. Only time in market and experience can resolve these questions.

2. Beyond viability of blockchain-based business models, the more immediate barrier is scalability.

At the moment, the Ethereum network could not handle rapid-fire trading of prediction market contracts on platforms such as Augur or Gnosis.

These issues are expected to be resolved over the next two years through a series of technical upgrades. They will constitute "hard forks", which will probably resolve without any problems, but there is some risk.

Bitcoin has similar scalability issues that will need to be resolved to support apps like Civic and Air.

3. Regulatory and legal issues.

The ICO funding model holds potential for a revolution in capital formation. But most ICOs are in a legal grey area in most jurisdictions.

Favorable regulatory guidance will need to be issued to bring blockchain projects into the mainstream.


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